Looking for great
savings?
 | Millions of consumers turn to QuoteMatch for substantial savings. |
| Try our fast quote to see for yourself! |
|
|
|
|
Top Five Commercial Real Estate Loan Challenges
Author David Schneider | Jan 07,2008
|
|
Owning your own business is one of the greatest American dreams. There is certainly nothing more satisfying than having a vision and seeing it come to fruition. It doesn't matter if you dream of selling your homemade ice cream, handcrafted handbags or any other goods or services -- the thought of doing it on your terms is an exciting one!Unfortunately, when these dreamers go to their local real estate agents and inquire about securing some property for their commercial endeavors, many of them discover that it's not as easy as they would have imagined! However, while purchasing commercial real estate is definitely more involved than buying residential real estate, it is still possible. Here are the top five commercial real estate loan challenges to be prepared for when applying for a commercial loan.Commercial Real Estate Loan Challenge No. 1Depending on your intended use of the property, it can definitely affect how easy it is to get the loan approved. Traditionally, properties designated for apartment or retail purposes make it easier to get the loan approved. If your business does not fall within those parameters, it's considered a "special purpose property."Types of special purpose properties include auto shops, gas stations, funeral homes and restaurants. Loans for these and other special purpose properties are getting more difficult to find.Commercial Real Estate Loan Challenge No. 2Most lenders require several years of tax return records before approving a commercial real estate loan. Since many smaller businesses have excessive expenses starting out, this practice can cause many problems in being approved for a commercial real estate loan. One way around this particular problem is to use a lender who follows the stated income method. Lenders who do not use the stated income method are likely to monitor your income even after the loan closes.Commercial Real Estate Loan Challenge No. 3Time. Many traditional commercial real estate lenders, like banks, can often take up to nine months to close a mortgage for a commercial property. If you do your research, you should be able to locate a more aggressive lender to close the loan in a more timely fashion, like in 45 to 60 days.Commercial Real Estate Loan Challenge No. 4A major problem in the commercial real estate industry is that many lenders have minimum loan sizes that are often too lofty for the needs of small business owners. In some cases, the least amount you can get in a commercial loan is between $500,000 and one million dollars. For a small business owner, the loan amount is excessive and payment is too high to manage.Commercial Real Estate Loan Challenge No. 5One of the most complex procedures in commercial real estate is when you try for a new, or refinance an existing, small business administration (SBA) loan. In the turmoil of the modern market, this can be a seriously frustrating exercise. However, by doing your research and looking online for viable solutions, you may be able to find the commercial real estate lender to offer you the loan you need.
Owning your own business is one of the greatest American dreams. There is certainly nothing more satisfying than having a vision and seeing it come to fruition. It doesn't matter if you dream of selling your homemade ice cream, handcrafted handbags or any other goods or services -- the thought of doing it on your terms is an exciting one!Unfortunately, when these dreamers go to their local real estate agents and inquire about securing some property for their commercial endeavors, many of them discover that it's not as easy as they would have imagined! However, while purchasing commercial real estate is definitely more involved than buying residential real estate, it is still possible. Here are the top five commercial real estate loan challenges to be prepared for when applying for a commercial loan.Commercial Real Estate Loan Challenge No. 1Depending on your intended use of the property, it can definitely affect how easy it is to get the loan approved. Traditionally, properties designated for apartment or retail purposes make it easier to get the loan approved. If your business does not fall within those parameters, it's considered a "special purpose property."Types of special purpose properties include auto shops, gas stations, funeral homes and restaurants. Loans for these and other special purpose properties are getting more difficult to find.Commercial Real Estate Loan Challenge No. 2Most lenders require several years of tax return records before approving a commercial real estate loan. Since many smaller businesses have excessive expenses starting out, this practice can cause many problems in being approved for a commercial real estate loan. One way around this particular problem is to use a lender who follows the stated income method. Lenders who do not use the stated income method are likely to monitor your income even after the loan closes.Commercial Real Estate Loan Challenge No. 3Time. Many traditional commercial real estate lenders, like banks, can often take up to nine months to close a mortgage for a commercial property. If you do your research, you should be able to locate a more aggressive lender to close the loan in a more timely fashion, like in 45 to 60 days.Commercial Real Estate Loan Challenge No. 4A major problem in the commercial real estate industry is that many lenders have minimum loan sizes that are often too lofty for the needs of small business owners. In some cases, the least amount you can get in a commercial loan is between $500,000 and one million dollars. For a small business owner, the loan amount is excessive and payment is too high to manage.Commercial Real Estate Loan Challenge No. 5One of the most complex procedures in commercial real estate is when you try for a new, or refinance an existing, small business administration (SBA) loan. In the turmoil of the modern market, this can be a seriously frustrating exercise. However, by doing your research and looking online for viable solutions, you may be able to find the commercial real estate lender to offer you the loan you need. |
|
|
|
Print
E-mail
Del.icio.us
Digg
