Commercial Property Loans in Singapore: 6 Things to Check

Buying a shop, office or industrial unit? Before choosing a commercial property loan in Singapore, look beyond the advertised interest rate. These six checks can help you avoid costly surprises.

1. Confirm how much you can borrow

Financing depends on the lender, property valuation, remaining lease and your financial profile. A lower valuation can mean a bigger cash outlay. Get an indicative assessment before committing to the purchase, and remember that final approval is subject to the bank’s checks.

2. Check personal versus company borrowing

Buying under a company does not automatically bypass borrowing rules. MAS states that TDSR applies to individuals borrowing for commercial property, and can also apply to individuals who set up a company solely to buy property. For business borrowing, check whose personal guarantees the bank requires.

3. Compare the full loan package

Check whether the rate is fixed or floating, what happens after the promotional period, and the lock-in period. Ask about early repayment penalties, refinancing costs, legal subsidy clawbacks and partial repayment flexibility. The lowest starting rate may not give you the lowest overall cost.

4. Budget for taxes and upfront cash

Allow for the down payment, legal and valuation fees, and Buyer’s Stamp Duty. GST may apply to a commercial property purchase; do not assume it is included in the price or automatically recoverable. CPF housing savings cannot fund a purely commercial property purchase. For mixed-use shophouses, ask your lawyer to confirm the tax treatment.

5. Stress-test your monthly cash flow

Can you manage repayments if interest rates rise, business income falls or the unit stays vacant? Include maintenance charges, property tax, insurance and renovation costs. Keep a cash buffer rather than relying entirely on expected rent.

6. Check the property and exit terms

Confirm the approved use, remaining lease and any restrictions with your lawyer and the relevant authority. Ask the bank how these affect financing, and what happens if you sell, refinance or repay early.

Buying soon? Loan$upermart can help you compare commercial property loans in your personal name or under a company. WhatsApp us for a no-obligation discussion.

General information only. Loan approval and terms depend on the lender; confirm tax and legal matters with your advisers.