What Type of Real Estate can I Finance?
Commercial real estate loans are typically used for companies looking to move from renting their office space to buying a commercial building, those buying large commercial rentals, and companies looking to expand their offices.
How Much Capital Is Available?
Commercial real estate loans range from a few hundred thousand dollars to upwards of $10,000,000. The larger the financing that is needed, the larger the collateral required will be.
How Do I Qualify?
When a bank looks at issuing a commercial real estate loan they look at three primary items; a) The value of the property, b) The credit history of the borrower, and c) The collateral available to secure the loan. If you can purchase a property for less than its value, show a strong credit history, and provide adequate collateral to secure the loan, you will likely be approved for commercial real estate financing.
What Type of Interest Rate Will I Pay?
Commercial real estate loans range from 4.5% on the low end to 12% on the high end. Many commercial loans also include a ‘balloon payment’ in which a lump sum is needed to pay off the note within 15 years or the property needs to be re-financed in the interim.
How Quickly Can I Get Financed?
Commercial real estate loans require thorough due diligence and the higher the price of the property, the longer the approval will likely take. If you have an existing relationship with the bank, your loan will obviously take less time and can be completed in as little as two months. If you are new to the bank, it could take much longer to approve.
Commercial real estate loans are available for both existing real estate and new construction for business use. These types of loans are a great way to enable a company to transition from renting to owning. Owning property long term can help strengthen a company’s balance sheet and develop collateral for future use.