Commercial bond applications are notoriously complex and time-consuming. Submissions from bond originators are typically a ‘lead referral’, with no pre-assessment of the client. Phoenix Bonds offers a point of difference - we aim to streamline this process and ensure that only the applications with merit will be submitted, to ensure that a consistent stream of qualified buyers are delivered to our banking partners.
Our value-add for commercial bond origination is:
Commercial lending is complex and the specifics of each application is assessed for its own merit. Due to the time involved in assessing and verifying commercial loan applications, we will only submit applications that have sufficient merit based on the criteria below to avoid time-wasting and disappointment.
A “quick check” against the qualifying criteria below will be a good indication of the chances of approval.
Typical property types for financing may include:
Property types excluded from commercial finance include:
These property types will need to be assessed under alternative financing options - such as residential, agricultural or business-residential finance.
The maximum Loan-to-Value (LTV) must first be established. Although LTV criteria is quite straightforward, the complication comes with assessing the value of the property. The market value of a property does not always equal the bank value of a property, and LTV criteria in the commercial space is based on banks value or the bank’s assessment of the return on the asset.
The property’s intended use will have an affect on how this assessment is completed:
The property value and maximum LTV will be determined before proceeding with the serviceability assessment and verification process, to ensure the client’s expectations are managed going into the process.
Serviceability is assessed differently depending on the intended use of the property:
Generally, 10 years or less. However, up to 15 year loan terms will be considered for cases that have merit.
Only commercial properties over R5M will be considered for finance.
Details on the commercial property:
Details on the juristic/borrowing entity:
Details on all Directors/Members/Trustees:
Phoenix Bonds originates long-term bank funding for commercial property transactions for industrial, retail and residential development.
We have an established network of property practitioners, attorneys and developers across South Africa. Our offices are based in Sandton (Head Office), Cape Town, Somerset West, Bloemfontein and Witbank.
All of our Property Finance Consultants have expertise in commercial property, as many of our property practitioners operate in both the residential and commercial space. Our mission is to be able to assist our property practitioners and clients with all their property financing needs.
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