Obtaining the best commercial property loan – Tips and advice to make it possible

Are you in the market to get yourself a commercial property loan? If answered yes, this shouldn’t be too tough right? After all, the lenders are waiting to lend you money and earn money in the form of interest rates. But the fact is that getting a commercial property loan can definitely be frustrating and difficult as there are a number of formalities that you have to go through. Nevertheless, you need not fret if you’re about to take out such a loan as there are number of steps which can alleviate the burden of getting the best deal in the market. Here are some such tips and advices that you may take into account.


Put your house into order

Before you even think of applying for a commercial real estate loan, you should first ensure having everything which a mortgage loan lender might want from you. Lenders will ask for your recent financial documents, rental schedules, tax returns, copies of leases, rental schedules, property outgoing statements, copies of sales contracts, asset and liability statements and bank statements. Commercial property loan lending institutions want everything and they want all that in good quality when they ask for it.


Know your property’s value

Borrowers who are of the opinion that their property’s value is more than its actual market value, this is considered unprofessional by the lenders. Commercial property is valued in either of the 2 ways, a comparison basis or on a capitalisation basis. The Cap rate for the property can be accessed through considering recent sales of the same property and by dividing sales price by the net income.


Have a strategy for your business property

Most of the lenders usually want to know about a borrower’s property or about the strategy, they want to know why they are borrowing the money and in what way the loan will improve the value of the property or in what way it will increase the income of the borrower. This is a strategy which needs to be presented clearly and you should maintain this strategy in front of the lender so that the loan officer doesn’t hesitate to lend you a commercial property loan.


Make a comprehensive research on the property sales and various properties

Before you take out a loan, you should spend enough time studying and researching comparable property assets in your locations. When you have information on properties and compare them with the others, you will get to know about the status of the market. Lenders greatly respect such type of knowledge from the borrowers.


Inform lenders about the amount that you’ll pay

Don’t let the lenders set the terms on the loan first as they will always set high terms on the loan. You should be on the front foot and tell the lender what you expect from them. What is the amount that you will be able to pay?

To know more on commercial mortgage, you may check out Commercial Mortgage Link as they have a string of information on such loans.

Featured image: © Copyright Fan Yang. Licensed for reuse under this Creative Commons Licence.

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