Securing a commercial property loan isn’t that easy. Rather, the entire process can be a downright difficult. Nevertheless, you’ll have a lot of different steps that you can take to make the process pretty simplified and streamlined. And if you follow the tips, which we’ve mentioned here, you may even find the best commercial mortgage deals. So without wasting any more time, let’s get started.
Plan your business well
So you’re applying for a commercial loan. That’s great but don’t expect any great results if you don’t have a specific business plan by your side, property operating expenses for the last two consecutive years, buy / sell agreement or an executed LOI, and a rent roll if non-owner occupied. For many commercial mortgage lenders, a full-fledged business plan matters a lot. And while preparing your business plan, you’ll have to make sure that it has financial records and statements, forecast, and other related projections.
Putting the money down on the table
Ok, while securing a commercial loan, you’ll have to put down a lot of money. Yes, that’s true because to get such a loan, you’ll have to make sizeable deposits. Most of the times, the deposit needs to be of 25 percent of the total loan value. However, sometimes the percentage can go up to 35 depending on the commercial building and risk imposed on the lender based on the opportunity and market comparables.
When it’s about loans, time is of the essence
Whenever you get a loan requirement, you shouldn’t sit on it for long. Rather, you should do everything possible to get the loan and start the process. That is, apply for the loan as and when you get the requirement because loan processing can take up to three months with most traditional financial institutions but as little as 30 days with alternative lenders.
So here are the top three tips that you should keep in mind while buying a commercial loan. If you have found these tips helpful, then do share it with other borrowers and spread the word. And if you aren’t eligible to secure a traditional loan, then pick a Commercial Mortgage Bridge Loan or any other alternative financial solutions to start your commercial project for a more streamlined and hassle free process.
This update is provided to you by Park West Capital. With over a decade experience specializing in real estate financing and commercial lending opportunities. We have assisted numerous clients with growing their real estate portfolios and providing the funding resources. We firmly believe in accountability, excellence, integrity, entrepreneurship, and teamwork. Contact us at 800-969-4901 to learn more about how we can professionally assist you with your investing needs or fill out our hard money loan application and we’ll get in touch with you.