Getting a commercial real estate loan can help you expand your business, diversify your investments or even get you started in a new career. Some business owners use these types of loans to save money on rent by paying a lower amount to their own mortgage. Loans for commercial properties are usually given to those companies looking to expand operations, but they can also be available to start-ups. There are requirements that you will need to meet to get a loan of this type as well as some things that you can do to prepare for the application process.
Some of the requirements for a commercial real estate loan are set by federal regulations and some are set by the individual lender. One of the biggest requirements is that the property is owner-occupied. This means that at least fifty-one percent of the building is housing your business. Different property types and businesses will have other regulations such as zoning considerations to take into account when trying to qualify for a commercial property loan. If you work with the Small Business Administration for a commercial property loan, then there will be other requirements such as the size of your company, but it can be easier to find a lender.
Lenders will look at a variety of different aspects of your business before extending you a loan, so it is a good idea to have your books in order and your paperwork prepared in a timely fashion. Preparing for the application process can not only help you be more thorough; it can also help you find areas of improvement before submitting the paperwork. For instance, if you have little to no business credit history, then it might be a good idea to look into loans for startups or in partnership with the SBA. You can usually sit down with a financial advisor to help get all your books and loan paperwork in order to qualify for a loan, your real estate agent can also help you find the right financing to go with the right commercial property.
A commercial real estate loan can help you expand your business in a more fitting space, can help you start a company and can even help you save money on rent payments. There are different requirements that you need to meet for a commercial loan than for a residential one, such as needing to run your business from a majority of the property. You can get help preparing for those requirements and for the loan paperwork through the lender or your real estate agent.