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Commercial Mortgage Lending Bad Credit | How to Get a Bad Credit Commercial Mortgage

Bad credit immediately makes it difficult to get any type of loan. But there are sometimes properties that you simply cannot pass up, and you know the investment is well worth your time and effort. If you have bad credit, there are loan options out there – but it’s not clear if you should take them.

Commercial mortgage lending for bad credit ended when the housing market crashed, and now lenders often do not approve loans for those that have good credit, let alone red marks on their credit scores. Still, there are options available to those that need it.

Bad Credit Commercial Lending

  • Story Lending – While difficult, it’s possible to get a loan with what industry insiders refer to as “story loans.” These are loans where you explain to a lender why you have poor credit and why they should still fund you. Story lending is very difficult to achieve, and often involves a significant amount of proof and possibly a broker/representative.
  • Hard Money Loan – A commercial hard money loan is a loan based on property value. It’s one of the most common commercial mortgage lending options for bad credit. The loan is often significantly less than the property value (you’ll need to come up with the rest), involves hefty fees, and a high interest rate of around 13%.
  • SBA Commercial Mortgage – Another option available to small businesses is a commercial mortgage through the United States Small Business Administration (SBA). The SBA 504 Loan Program provides small businesses with up to 5 million in loans split amongst three different entities. This loan is only provided to those that are planning to occupy at least 51% of the property with their own business.

All of these commercial mortgage lending choices can help those with bad credit get loans on their property. But keep in mind the rates are significant, and often take away hundreds of thousands of dollars from your potential earnings on the property. Even if you are able to take out one of these loans, make sure you’re doing whatever it takes to fix your credit so that you can refinance with a better loan in the future.

To learn more about bad credit commercial mortgage lending or to find out how to connect with some of the best lenders for commercial properties, sign up with CRE Lender today. We are a direct connection to some of the best loans in your area, and a proven way to get your hands on any loan that you qualify for.

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