Borrowing for commercial real estate is different from a home loan. Commercial real estate is income-producing property used solely for business purposes. Examples include retail malls, shopping centers, office buildings, and complexes. Financing, development, and construction of these properties is typically accomplished through commercial property lending or commercial real estate loans: mortgages secured by liens on the commercial property.
How to Find Commercial Property Lending
Commercial property lending loans are generally used to purchase or renovate commercial property. Lenders usually require that the property be owner-occupied, meaning that your business will have to occupy at least 51% of the building. To get a commercial real estate loan, you’ll need to decide on the type of commercial property lending you need — depending on the property and business — and then narrow down your lender options.
What Do Lenders Look For?
Commercial property lending partners have three sets of requirements before granting a commercial loan to your small business. These requirements pertain to your business’s finances, your personal finances, and the property’s characteristics.
Where to Get a Commercial Real Estate Loan
If you’re wondering how to get commercial property lending, there are multiple sources from which you can obtain it. You’ll have to compare commercial loan rates from various lenders to find out which one works best for you.
With commercial property lending, an investor (often a business entity) purchases the property, leases out space and collects rent from the businesses that operate within the property. The investment is intended to be an income-producing property.
When evaluating commercial real estate loans, lenders consider the loan’s collateral, the creditworthiness of the entity (or principals/owners), including three to five years of financial statements and income tax returns, and financial ratios, such as the loan-to-value ratio and the debt-service coverage ratio.
Here at Real Estate Funding Solutions, we have developed strong relationships with direct lenders as well as private investors with over 20 years of experience in the industry which enables us to structure and close on all types of loans for real estate properties across the nation including commercial property lending. We have partnered with several commercial banks and real estate mutual funds lenders to provide the best financial service for consumers nationwide. Call us at 1-855-913-8637 or send us an email at info@realestatefundingsolutions.com to get started today!