Being a business owner, you may need commercial properties for expanding your business. Having limited funds, there arises need to acquire commercial property loans. With number of providers available to offer commercial property financing option, it’s not difficult to obtain loans. However, you need to be well aware of some of the important considerations while making a decision.
Submission of business plan
During commercial financing, you had to submit your business plan. There is no problem in providing an overall view of your business to the lenders. However, there are some lenders who demand for minuscule business details. It’s not safe to offer such exhaustive information about your business. Always choose a lender who is satisfied with the information you give. It’s not desirable to work with the lender who monitors your tax returns.
Financing for special purpose property
Sometimes, there is difficulty in finding financing for special purpose properties. Obtaining loans for office building is quite easy, but it’s really difficult to get it for restaurants. You need to thoroughly search the internet for finding the lenders who offer lower interest rates for certain type of business properties.
Long term loans
While buying loans for commercial properties make sure to buy the one for longer period of time. A short term loan is avoided when you intend to buy commercial properties. You can manage a loan term loan with the lower monthly payments. If you still wish to buy short term loans, you must have high cash flow.
Avoid your personal property as collateral
Always keep in mind that you should never use your personal property as collateral for commercial property financing. Lenders take the help of DCR i.e. debt coverage ratio which acts a deciding factor while offering you loan. This ratio also reflects upon your ability to pay the loan. DCR varying from 1 to 1.2 is preferred by the lenders.
Are you looking to buy a new commercial property? If yes, then we at 700 Fico Club are here assist to you with your Commercial Property Financing. Our team are also seasoned Real Estate Brokers and can help you to locate a property of your dreams. For more information you can call us or email us your queries.