Yes! It is possible to get a commercial property loan as some banks provide this facility. But there is differences when you go for a residential property loan and a commercial property loan which you need to know. Blog: https://financebuddha.com/blog/all-you-need-to-know-about-commercial-property-loans

1. All You Need to Know
about Commercial
Property Loans

2. It is possible to get a commercial property loan as some banks
provide this facility. But there is differences when you go for a
residential property loan and a commercial property loan which
you need to know.

3. You can get a commercial property loan to serve either of the two
purposes:
 For an office space
 For outlets

4. Let us now understand what are the differences between a residential
property loan and a commercial property loan.
Low Loan to Value ratio (LTV):
 In case of residential property, it ranges between 75-90%, however,
it is restricted to a maximum of 55% for commercial purchases.
 This means when you go for a commercial property loan you need
to provide a major from your pocket.

5. Processing Fees:
The processing fees which you need to pay for a commercial property
loan is comparatively higher than that for a residential property. As for
residential property, it is generally a maximum of INR 10,000 but in case
of commercial, it is mostly 1% of the loan amount.

6. Interest Rate:
When it comes to interest rate, the interest rate payable for the
commercial property loan is a bit higher than the interest payable
on the residential property loan.

7. Tenor:
 There is a huge difference between the tenure of a commercial
property loan and a residential property loan.
 The tenure period of a residential property is a maximum of 30
years.
 The tenure period of a commercial property loan is a maximum of
10 years.

8. Builder Category:
 Generally commercial properties take lesser time for construction
than a residential property.
 If the builder has a bad reputation regarding the delivery of the
projects, then the loan application will get rejected.

9. Technical Evaluation:
 The property needs to comply with all the required technical
specifications.
 The lender will send an authorised technical evaluation team to verify
each and every technical detail.
 Similar verifications do exist for residential properties, but strict
compliance is required for commercial properties.

10. Statutory Approvals:
 To be approved for a commercial property loan, the builder of the
property will need to present the approved clearances for the
building plan, clearances from the fire department etc.
 There should not be any risk of demolition involved due to any
pending approvals or rejections.

11. Property Valuation:
 While borrowing for a commercial property, the borrower and
the builder/seller may try to value the property higher to avail
higher loan amount.
 To counter it, the lenders outsources property valuation to an
expert evaluation team.
 The lender considers the valuation which is of the lowest value so
as to lower the risk.

12. Residual Age of the Property:
 Older properties have higher chances of not being compliant with
the technical requirements of the loan.
 Older properties might not have the basic modern requirements
which increase the risks involved, and hence the chances of loan
application getting rejected.

13. Minimum Area:
 The lenders tend to fund only a minimum area in square foot for
commercial properties.
 But a lender might also reject to fund an area which is less than
250 sq. ft.
 This varies with lender to lender hence it would be wise to check
with them.

14. Borrowing for a commercial property is costlier due to low tenure
and high interest rates, and also follows a tougher process as
compared to borrowing for a residential property. But the return on
investment is much higher for a commercial property than it is for a
residential property.