Like any financing, Commercial mortgages come with both risks and rewards that are important to evaluate for any business or investor considering property ownership. One of the primary rewards is the potential for wealth creation through property appreciation and the ability to customize the space to fit specific business needs, which can lead to operational efficiencies and cost savings over time. Moreover, owning a property can provide long-term stability by eliminating the risks associated with lease renewals and rent increases. I often told my coaching clients who owned businesses that if they had the opportunity to purchase the building make sure they put in the effort to make this happen. For some business owners, what they walk away with at the end of their career is sometimes the building and its value.
However, the risks associated with commercial mortgages are significant and should not be overlooked. These loans often come with higher interest rates and fees due to the increased risk perceived by lenders, and the property itself may be more difficult to liquidate compared to residential real estate. Additionally, commercial mortgages typically require a larger down payment and shorter amortization periods, which can strain a company's cash flow. Borrowers must also be aware of potential prepayment penalties and the risk of loan calls, which could require immediate repayment under certain circumstances. Therefore, thorough financial planning and risk assessment are crucial when considering a commercial mortgage. That being said, the return can be substantial.
So what are the rates like now?
Last week I conducted a survey of my local bankers and was told the following.
RBC Norm Hebert
1. What are the commercial rates range of lending at the moment? 5% to 6% range (trending below 5% for low leveraged, low risk clients)
2. What types of commercial lending do you prefer at the moment. RBC is open to most industries. Cautious with the Forestry industry, however, still lending and supporting many clients in that industry.
Anything else you would like to say to possible borrowers about your institution. Fully open for business in all sectors. We are are seeing a lot of activity in succession planning transactions (change of ownership) and are happy to compete in that space.
Feel free to contact
Norman Hebert | Senior Relationship Manager, Commercial Financial Services I 550 Victoria Street, 2nd Floor, Prince George, BC V2L2K1 | RBC Royal Bank | Royal Bank of Canada | T. (250) 960-4594 | M. (250) 552-1466
Canadian Western Bank
What are the commercial rates range of lending at the moment?
Table 1): Clients with avg. risk industry with good collateral.
*Higher risk industries and lesser quality collateral could see up to another 35-55 bps on these rates.
Bottom part of the Table 2):The bottom table would be for a bigger clients with stable market share, balance sheets, and higher quality collateral, where we’d want to compete.
Feel free to Contact
Rhys Elliot
Relationship Manager, Commercial Banking
. 250-649-3101 | f. 250-612-0129 |
Email Rhys.Elliott@cwbank.com
CIBC Braden Cook
Our commercial floating rate is generally Prime + 1%, current Prime stands at 6.45%. The Bank of Canada has another 2 interest rate announcements before the end of the calendar year (October 23rd and December 11th) which they are anticipated but not guaranteed to reduce by another 25bps each. Our fixed rates have come down with the rate reduction announcements and are in the 6% range dependent on the term, available in 1 – 5 year terms.
We offer banking partnerships to wide range of industries, by way of operating, equipment, owner-occupied real estate, and business acquisition financing.
We are a relationship oriented bank, looking to support and grow with the business owners in the Central and Northern B.C. community for the long term.
Feel free to contact
Braden Cook, B.Comm | Manager | Commercial Banking | Northern BC | CIBC1410 3rd Ave, Prince George, BC V2L 3G2 | Tel: 250 614-6444 ext. 453 | Cell: 250 552-1596 | braden.cook@cibc.com
Scotia Bank Response from Kurtis Friend
1. What are the commercial rates range of lending at the moment?
4.5%-6.5% range
2. What types of commercial lending do you prefer at the moment.
Full banking for operating companies (operating accounts, operating lines, owner occupied real estate).
Business acquisition financing, MBO’s, MBI’s, etc.
MUSHA financing (Municipalities, Universities, Hospitals, Aboriginal [including ec. devs’])
Limited appetite for stand alone loans, such as income property lending or stand alone equipment lending.
Anything else you would like to say to possible borrowers about your institution
Happy to provide any business with a discussion paper, to offer a secondary opinion on their financing arrangement.
Feel free to contact
Kurtis Friend | Sr. Client Relationship Manager
_____________________________________________________
Scotiabank | Commercial Banking Distribution
390 Victoria Street
Prince George, BC, Canada, V2L 4X4
C 778.675.4920
Beem Credit Union - Formerly Interior Savings Credit Union
Commercial Lending Rates: Our rates can fluctuate depending on various factors, including the Prime rate and specific lending products, but generally, they fall within a competitive range that aligns with current market trends.
Preferred Types of Lending: At the moment, I’m focusing on a variety of commercial lending options, including real estate development, equipment financing, and working capital lines of credit. Each loan is tailored to meet the specific needs of the business, and we are always open to exploring additional commercial lending opportunities.
At BEEM Credit Union, we prioritize building long-term relationships with our clients. We offer personalized service and work closely with businesses to provide flexible, customized financial solutions. We're here to help you grow and achieve your business goals.
Feel free to contact
Commercial Account Manager
Prince George, 250-612-8845
BDC - Brian Woodbeck
1. What are the commercial rates range of lending at the moment? As low as 5.6% on a 3 yr rate or 7.05% on a floating rate, and rates increase from there based on the risk of the transaction, and security available.
2. What types of commercial lending do you prefer at the moment. High loan-to-value loans on owner occupied industrial and commercial property purchases, and business acquisitions regardless of the value of the assets.
Feel free to contact
Brian Woodbeck
Senior Account Manager | Directeur principal
T 250-561-5336 C 250-649-6606 F 250-561-5512
Integris Credit Union - Sandra Rose
Rates on Commercial Loans can vary significantly depending on the type of security in place, strength of the borrower and historical results of the business, and whether Integris is the primary institution.
Commercial rates have come down as well in recent months.
As an example, a mortgage for on a commercial property is currently in the range of 6.50% give or take 0.25% for a 5 year fixed rate.
A variable rate for a commercial property is currently Prime + 0.65%
Please note rates are subject to change at any time.
Integris is open for business and happy to look at all types of Commercial Lending inquiries - real estate purchases (commercial, industrial, multi-family residential), equipment, working capital, line of credits
We do require that a business typically be in operation for at least 24 months with accountant prepared statements.
We are open to looking at developer construction financing for multi family/residential developments
Questions? contact
Sandra Rose
Senior Manager, Commercial Services
1532 6th Avenue, Prince George, BC V2L 5B5
T: 250-612-3556
TF: 1-866-554-3456
Private Capital
Borrowing private capital involves securing funds from individuals or private entities rather than traditional financial institutions like banks. Private capital lenders typically offer more flexible terms and faster access to funds but often charge higher interest rates due to the increased risk. This type of financing is commonly used in real estate, startups, and businesses needing quick funding for growth, acquisitions, or other investments. Borrowers must carefully assess the terms and risks to ensure the capital supports their goals effectively.
Kingsman Capital - Benny Manasherov
We represent a diverse group of private lending partners both nationally and internationally across North America. For loans between $50K and $300K, we offer unsecured options at rates typically around prime plus 8%, designed specifically to support young, small businesses in accessing BDC and EDC programs.
For amounts ranging from $300K to $5M, we provide asset-based lending (ABL) or revolving lines of credit. One key benefit is that I do not charge any commissions to borrowers—the lenders cover my origination fees. Once the loan is secured, I also serve as the relationship manager for the client, ensuring ongoing support with no extra charge.
Our goal is to expertly navigate the private lending market and tailor the right match between lenders and borrowers.
Need more Information?
Contact
Benny Manasherov
250-552-4855
Conclusion:
Bank rates seem to be on the decline and there are a variety of lenders in the north who are open to options for your lending needs. It is worth scheduling a meeting in advance of your investment purchase to enable you to be fast tracked for investments.
I hope you enjoyed the read, let me know if you have any questions about commercial real estate or would like to hear more from other experts.
David Fuller, MBA, Realtor
Team Powerhouse Realty
250-617-7467
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