Business Loan

Commercial Property Loan: Guide to Your Options and How to Prepare for the Application Process

Investing in commercial property is something that most businesses have to do at some point or another. It doesn’t matter whether to set up a new office, buy an office or warehouse, expand to other areas, or entirely invest inland. If you feel that it’s time to get some property for your business, you’ll need to look for financing options. A commercial property loan is an option that many business owners look into initially.

As with any loan, this one might not be easy for a business to get – especially if they are start-ups or struggling with debts. What do lenders look for, exactly? There are a few requirements that companies must meet for approval by most lenders. Businesses’ finances are essential since you’ll need to prove that your company is financially stable enough that you’ll be able to make the payments.

Your finances will probably also be looked into – especially if you haven’t established any business credit. If your finances aren’t all that great, how can the lender trust you with a commercial property loan? Thirdly, the lenders will be interested in the characteristics of the property itself. There is a high chance that you’ll have to put it up for collateral per the terms and conditions of the loan. Your business will probably have to occupy over 50% of the building to qualify for most loans.

Commercial Property Loan Requirements

If you still want to go through with the application process, here are a few things you’ll need to have prepared:

· Projected cash flow for the duration of the loan

· Around five years of tax returns

· Credit reports of all owners/partners

· Property appraisal by a third party

· State certification as a limited liability entity or corporation

· Books, financial records, reports, etc..

· Proof of citizenship (for specific programs)

Not only will your past and current finances be scrutinized when applying for a commercial property loan, but your projected future ones will be as well.

If you’re concerned that you won’t meet the criteria mentioned above for getting approved, then there are other options. For example, you might be able to secure a community grant depending on your type of work. You may also be able to use a lending source with less-strict requirements, such as a P2P lender, or add an angel investor, co-signer, or partner with more financial stability.

Whatever your situation is like, you can learn more about commercial property loan options and alternative solutions at Trust Capital Funding.

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