Are you buying a commercial property to run your own business in, or to lease out and hold for income? Lenders weigh the two differently, and so does the financing. Knowing which side you are on, before you shop, sets up a stronger file. Here is the difference, and how our Halifax team maps it with you.
You buy the property to operate your own business in it. Lenders look at your business's cash flow and the property together. For many owners it is a way to build equity instead of paying a landlord.
You buy to lease out and hold for income. The file leans on the property's rent and its DSCR (debt service coverage, whether the rent covers the financing), with the tenants and leases front and centre.
Owner-occupied leans on your business; investment leans on tenant rent and DSCR.
Both usually call for more equity than a home; an investment file can call for more.
Central to an investment file; less so when you occupy the space yourself.
Term, amortization, and conditions can differ between the two paths.
Tell us whether you will occupy the space or lease it out, and we will line up the financing that fits, with one team weighing every angle. A licensed member of our commercial team will follow up.
Start a conversationInformation here is general and educational. It is not financial, legal, or lending advice, and it is not an offer of financing. How a deal is assessed, including income, equity, and coverage measures, varies by lender, property, and province. Any figures or ratios are illustrative only. All financing is subject to lender review, property review, and supporting documentation. Submission of a form does not guarantee approval or financing.