3 Things You Need To Know About Getting A Commercial Property Loan As A New Business Owner

15 July 2016
 Categories: Finance & Money, Blog

If you are in the process of opening up your first business or are in the process of expanding your small business and are in need of a commercial property loan, here are a few things that you need to know about commercial property loans and lending.

Have Your Business Plan & Information Ready

A commercial lender is not just going to take your word for it that your business is solvent; they are going to want proof that your business is doing well and that you have a solid business plan in place. These types of lenders are used to looking over businesses financial records, forecasts, projections and business plans in order to assess risk and determine whom they want to invest their money in.

If you want to be taken seriously by a commercial lender, you need to have your business plan completed and laid out. You are going to need to have detailed forecasts and projections concerning where you see your business going as well as details about how you are going to get there. You will also be expected to show the bank all of your recent financial records and statements; the lender is going to want to make sure that you are capable of meeting your monthly loan obligations. 

Prove That You Are Invested In The Property

Next, you are going to need to prove to the commercial lender that you are invested in purchasing the property and that you are not expecting the bank to take all of the risk. The best way to do this is by showing that you are ready to make a significant financial investment into the property as well.

You should have the cash to pay for the down deposit on the property as well as all closing costs. It can help your case if you are able to put down a large down payment. Most commercial lenders will not write you a check for the entire cost of the property; they will expect you to be able to pay at least a portion of the cost of the property yourself. You increase the chance of getting the loan you want by savings before you go after your first property. 

Apply For A Loan Right Away

Finally, once you find the right property, put in a loan application right away. The commercial application process can take a long time, so it helps to get the process started right away. 

Research lenders, like Home State Bank, that you are interested in using before you start looking for a property, get your paperwork in order and save up your money so that when you find the right property, you are able to start the commercial loan application process right away.