Want Commercial Business Loans But Don't Have The Foggiest Clue...
How To Qualify Or The Best Place to Get One?
Here, you'll learn in detail 8 things you need to know BEFORE applying for commercial business loans.
Follow along as I relate a common occurrence in local banks across the U.S....
Tick tock... The banker finally arrives. With a bit of anticipation you stand and give a firm handshake.
“I want to apply for a commercial business loan.”
That simple sentence ignites a little conversation in the bankers head.
She thinks to herself: Hmmm, does he have an account here?
How long has he been in business? Etc., etc., etc.”
As the banker asks application questions, do you feel a bit lost?
“What does she mean by pro-forma? Why doesn’t she ask more questions about my business? I could tell her oodles and oodles about that.”
You see, often there’s a disparity between what goes on in the mind of the business owner and that of the lender.
You can close the gap by educating yourself about commercial business loans, what they are, how they work, and which kind is the best for you.
Here are questions that business owners like yourself have asked in an effort to get those answers…
Your Questions
1. What exactly are commercial business loans?
2. Can I get a regular mortgage instead?
3. How do I qualify?
4. Do I need perfect credit?
5. Where’s the best place to get one?
6. What is a good rate?
7. What documents will I have to provide? What do they all mean? &
8. How can I make sure that they make me look good?
Real Answers
1. What exactly is a commercial business loan?
A commercial business loan is basically another term for a commercial loan or a commercial mortgage.
It’s a loan that is secured by commercial property.
Then the question becomes, what constitutes commercial property? Commercial properties are all properties that aren’t residential.
Residential properties are single family residents and multi-units apartment buildings up to 4 units.
So a multi-unit with 5 or more apartments is a commercial property. Office buildings, retail storefronts, warehouses and industrial factories are all examples of commercial property.
All commercial business loans aren’t secured by commercial property. Some are secured by the business but not the property, the business and the property, or just the equipment alone.
2. Can I get a regular mortgage instead?
You can get a residential mortgage only on a residential property. So it’s very important to understand what properties are commercial.
But there is good news. Some commercial properties are easier to finance than others! This table gives examples of the amount of ease or difficulty is associated with financing certain property types.
| Easiest | Moderate | Challenging | Most Difficult |
|---|---|---|---|
| 5+ Multi-Family | Warehouse | Bar/Tavern | Day Cares |
| Office | Light Industrial | Automotive | Restaurants |
| Retail | Mobile Home Park | Funeral Homes | Hotels (Unflagged) |
| Mixed Use | Bed & Breakfast | Hotels (Flagged) | Nursing Homes |
| Self Storage | Heavy Industrial |
Often people ask if there is any way possible they can get a residential loan especially on mixed use or multifamily commercial properties.
Sorry. The answer is absolutely not. The only way to get a residential loan is to purchase, build or refinance residential property. (Instances where lenders may bend this rule are extremely rare. Practically extinct.)
Note that there are significant differences between commercial real estate mortgages and residential loans. They differ in structure and benefits to you such as…
- Available mortgage products
- Mortgage features and benefits
- Average interest rates
- Credit requirements and more
Don’t be taken by surprise. Get to know the world of commercial real estate and how to finance it.
3. How do I qualify?
Much like a residential loan, to qualify for a commercial business loan, you’ll have to go through the loan process.
And a process it is indeed! It includes these critical phases…
- Application
- Pre-Approval
- Processing
- Underwriting and
- Closing
To get to that final step. The one we all want. You’ll have to “pass.” Yes, make the grade through each step and the closing table will be your destination!
How do you make the grade?
1.)You must be willing and able to provide all of the documentation that lenders will request.
2.) Be sure to strengthen each underwriting criteria that they evaluate.
With our help at Guide-to-Business-Loans.com, you'll know if you qualify because we...
- Teach you the specific underwriting requirements for traditional commercial real estate financing
- Show you how to do the math just like the lenders do for a commercial secured loan
- Give you access to our commercial loan calculator
- Teach you how to get through every step of the loan process without hassle, hidden fees, or the risk of being denied.
You have access to all you need to know if you qualify.
4. Do I need perfect credit?
Good credit scores are required with traditional lenders such as banks and credits unions. Thankfully, though, it’s NOT a requirement with a hard money lender.
5. Where’s the best place to get one?
Good question. There are so many sources. Banks, credit unions, brokers, hard money lenders, and the list goes on and on and on.
The best place to go really depends on your financial picture and your personal needs.
For example, if the picture your financial statements and credit paint is A++ and squeaky clean, step right into your local bank of choice. Each will raise their hands high requesting your business.
If it’s not picture perfect however,
utilize the services of a finance specialist.
Brokers partners with multiple lenders including those with more flexible underwriting requirements.
A good broker is skilled in referring borrowers to the lenders that fit their financial picture. They avoid charging unnecessary upfront fees.
Like a father with a son, they hold their client's hand as they continuously educate them through the loan process.
6. What is a good rate?
The battle for the lowest interest rate doesn’t have to be such a fight after all.
I’m going to tell you a sure fire way to get the lowest commercial loan rates possible.
It’s a simple solution to the stress of worrying about securing the “best” rate. Click here to learn more about it.
7. What documents will I have to provide? What do they all mean? & 8. How can I make sure that they make me look good?
- Personal financial statements
- Business financial statements
- Subject property financial statements
- Personal credit report
- Business credit report
- Rent rolls
- Leases
- Corporation documents
- Personal tax returns
- Business tax returns
- Bank statements
- Pay stubs
- Business plan(s)
- And more…
Each document adds a paint stroke to your financial picture.
What do your commercial loan documents say about you?
Do they ring with credibility and creditworthiness?
Are they peppered with stability and experience?
Whether you answered yes or no, you would likely still want to know...
Do you have more questions about commercial business loans that you’d like to see answered here? Please ask at the Business Loan Express Contact Us Page.
We’ll be happy to provide real answers.
(630) 755-6979
Here's How to Get Commercial Funding Without...
- Waiting Months on End to Close
- Paying $1,500 or More in Unnecessary Non-Refundable Fees &
- Without the Increasing Chance of Rejection
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