Businesses, individuals, and major corporations often buy properties as both investments and as locations to run their business. Some of these buildings are small, costing less than a single family home. Others are much larger. No matter the size, these properties represent significant investments.
Few companies have the capital to invest hundreds of thousands of dollars into purchasing a property outright, and those that do rarely want to dip into their savings for that much of an investment. That’s why most commercial properties in today’s market are purchased with commercial loans.
Why Commercial Loans?
The idea behind commercial loans is simple – allow businesses (and individuals purchasing commercial properties) the opportunity to fund those properties without too much of their own capital. Few have the amount on hand necessary to purchase a property outright, and those that do often find that they would rather take the monthly payments rather risk all of the cash they have on hand for emergencies and improvements.
A commercial loan is nearly identical to a traditional mortgage, but the size, scope, and requirements are different. Commercial loans:
- Require Greater Investment – Because of the nature of commercial loans, the down payment may be larger than with traditional mortgages.
- Need Proven Value – You may be required to prove that the commercial loan is worth the investment to banks. Banks need to see your loan can be paid off.
- Have Extensive Underwriting – Because these loans do represent a fairly sizable investment to banks, commercial mortgages may require extensive underwriting.
Commercial loans will require good credit and the ability to show that you’re a worthwhile investment. They may also require a quality debt service coverage ratio, and site tours, and more.
But while these may concern you, the truth is that any quality loan is possible when you work with someone that can help you navigate through the commercial lending environment. At CRE Lender, we’re the number one source for commercial loan applications. We have years of experience directing you to the lowest cost loans and connecting you to lenders that can fund your projects.
Those that work with CRE Lender are consistently impressed by our speed, and the rates they are offered by lenders. If you’re interested in learning more about the commercial loan options available, or you want to get started with your paperwork and own your next commercial property, sign up with CRE Lender today.
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