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Property Types
- Office
- Industrial
- Retail
- Multifamily
- Agricultural (ranch/farm)
- Ambulatory care
- Apartment
- Apartment over retail
- Assisted living
- Automotive (gas station/car wash)
- Bed & Breakfast
- Boarding House
- Church
- Commercial Building Lot
- Congregate Living
- Corporate Apartment
- Daycare Facility
- Dry Cleaner/Laundromat
- Free Standing
- Garden Apartment
- Gas Station
- Golf Course
- Heavy Manufacturing
- Hi-Rise Apartments
- Historic Property
- Hospitality (hotel/motel)
- Land
- Leisure (golf course/resort)
- Light Manufacturing
- Loft
- Low Income Housing
- Low-Rise Apartments
- Medical (hospital/clinic)
- Mid-Rise Apartments
- Mixed Use Property
- Mobile/Manufactured Home Park
- Office: Hi-Rise Tower
- Office: Mid-Rise Tower
- Office: Single Tenant
- Office Condo
- Outlet Mall
- Parking Lot
- Rehabilitation Center/Facility
- Restaurant
- Self Storage
- Senior Housing
- Single Tenant Building
- Special/Single Purpose Building
- Strip Center
- Student Housing
- Warehouse/Distribution
Commercial properties connote the fact that income will be generated through their inherent purpose. As is the case, each individual loan and transaction is underwritten specifically and with its own unique merits. Some key criteria underwriting looks for are:
- Financial Analysis. This includes the debt coverage ratio. Underwriting typically never goes below a 1:1 ratio, where the property is essentially breaking even. On average (but remember, each case is unique), a 1.25 ratio is needed on traditional commercial financing.
- Loan to Value. Unlike residential property financing, commercial investment properties and the financing for these properties is held in much more conservative reigns. Typically, a minimum of 20% of equity must be injected into the property from the borrower. The remaining 80% can come from the form financing.
- Credit Worthiness. For businesses running less than three years, personal credit will be evaluated. This may hold true for longer periods of time depending on each unique case. For corporations, business performance and credit worthiness will be evaluated.
- Property Analysis. In almost all cases, FMV (Fair Market Value) and FMR (Fair Market Rent) will be closely assessed. The variables that factor into this include, but are not limited to, age, appearance, local market, and accessibility of the property.
- Lending ratios. These include loan to value ratio, debt ratio, debt service ratio, among other numerical values placed on the overall financial climate of the both the property and the borrower(s), and other monthly obligations.
Loan Programs
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Credit Lines
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Short-term loans
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Asset based loans
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Contract financing
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Bridge loans
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Factoring
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Term loans
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Hard money loans
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Equipment and real estate loans
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Leasing, through a bank or leasing company
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Three (3) to Fifteen (15) year balloon loans
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Adjustable rate loans
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Mezzanine loans
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Take-out loans
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Construction loans
Loan terms can range anywhere from:
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3 Month ARM
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6 Month ARM
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3 Year ARM
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5 Year ARM
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7 Year ARM
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10 Year ARM
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2 Year Fixed
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3 Year Fixed
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5 Year Fixed
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7 Year Fixed
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10 Year Fixed
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15 Year Fixed
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3 Year Interest Only
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5 Year Interest Only
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7 Year Interest Only
Amortization of these loans can go anywhere from 10 years to 30 years. The options provide flexible and creative financing…for the right property. Please contact a Mortgage Advisor today to look into your financing options.
Application Checklist
Commercial financing takes more time and analysis than other types of financing, such as residential. The following list will help you identify the types of information a banker will need to make an informed decision about your business and the options for financing:
1. Three years income tax and financial statements
2. Year-to-Date Profit and Loss balance statement
3. Personal finance statement
4. Projected cash flow statements for the next 12 months
5. Pro Forma for the next 12 months/length of the loan
6. Federal and State tax information and documentation
7. Collateral Sheet
8. Comprehensive business plan
9. Executive summary (if applicable)
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