Commercial Property Loans

Loan Fees:  4.75-6%

Processing Fee: $965.00 Legal Doc Prep: $750.00 (If needed)

Interest Rates:  Very Competitive

Loan to Value:  Not Greater Than 60%-65%

Overview:

There are several differences between Commercial Private Money loans and Residential Private Money loans.  First and foremost, Commercial loans are not regulated, and thus not subject to most of the state and federal regulations.  That makes them easier to get done…..but on the other hand, private lenders tend to be less enthusiastic about loaning on commercial property.  There is a perception that they are riskier loan and that drives the rate up a bit.

Certain types of commercial property are easier to get a hard money lender interested in.  The difficult ones however are:  Single use buildings, i.e., restaurants, medical buildings, gas stations, etc., and for obvious reasons, they can be leased or sold to a smaller group of users.

Although commercial lending is less regulated, you will still be expected to show a lot of information to a potential lender.  Be prepared to show the following:

1.     2 years tax returns for both personal and business (if applicable).

2.     W-2’s and current paystubs (if applicable).

3.     A current financial statement, both personal and business.

4.     A YTD profit and loss statement.

5.     A YTD income statement.

6.     Credit Report.

7.     Business and personal bank statements.

8.     Copies of all lease agreements on the subject property.

A lender is also going to want to see a preliminary title report and a history of the property taxes, zoning and permits.  Depending on the type of property, they might also require an environmental impact study and or an environment hazard report.

In years past, appraisals were not necessarily required for a hard money commercial loan.  In current times, however, the county assessed value of properties is not necessarily trusted by lenders, so unless you have massive equity, you best be prepared for the expense of a commercial appraisal.

Experienced commercial owners will see this and say, shoot, this is the same things that a bank would require!  I thought this type of borrowing would be easier.  Well my friends, in the current world, as you know, there is no such thing as easy!  If your client has all of this info and the bank will give them a loan, they should run, not walk, to the bank and sign papers!  The problem is, very few banks are making many loans at the moment, and very few people can meet bank qualifications.  Private lending is still easier to qualify for and if they need money, it might be the only option!

For a frank and confidential conversation to determine if private lending and working with us is right for you, please contact us!