Commercial Real Estate Loans: Approaching the Commercial Lender

You’re searching for commercial real estate financing – what’s the greatest approach to take in contacting lenders?

The loan quantity and terms you’ll acquire will vary significantly, depending on different property characteristics.

When you contact the commercial lender, try to have as much of the following details as achievable obtainable:

1)      The sales price or estimated value of the property

2)      The loan amount desired

3)      The property sort, such as approximate age of the improvements, square footage, lot size, and in the case of apartment buildings, the number, size, and kinds of apartments, who pays utilities, and what the parking arrangements are.  In the case of commercial properties, the tenancy, and when leases expire.  If the creating is occupied by, or being purchased by an “owner user” type of company/borrower, try to locate out what the exact same space would rent for on the open marketplace.

4)      The income, and what expenses the owner pays. 

five)      The borrower’s credit, overall financial situation, and other properties owned. 

Lenders are interested in how much other property your borrower owns, and what, if any, expertise your borrower has in managing the sort of property becoming purchased.

6)      If the property is owned by an LLC, Corporation, or other entity, be ready to

offer simple info about the monetary standing of that entity, as well

7)      If achievable, try to find out what properties are adjacent to the subject property.  This can be helpful in identifying achievable environmental concerns.  (Relating to chemical seepage from adjacent properties.)

With this details, the lender can indicate if the loan request fits their lending criteria, and if so, what other data is needed.  In several instances, the loan officer will prefer to drive by the property before any far more info is gathered, and at times before loan terms are even quoted. 

Want to get the commercial loan officer on your side appropriate from the begin?  Of course! 

Attempt this:  Take some digital photographs of the front, rear (if feasible) and sides of the creating.  Then, take a photo of what’s on either side of, across the street from, and in back of the building.  Type up a brief two page narrative description of the property and your loan request.  This gives the loan officer a easy description of the property, the  borrowers situation, and the want for financing.  You can even present rent rolls on apartments and details about leases and expiration dates on commercial buildings. 

E-mail this info to the lender, requesting a response.  Offering this information

Not only will the lender see that you know what you’re performing, you’ll get a quicker, much more accurate response to your request.

As you work repeatedly with the same lenders, you’ll understand what type of info they  need to think about a loan request.  Constructing relationships with your commercial lenders will be a excellent assist in closing commercial loans.  You’ll uncover that many commercial loan officers have a considerable say in the final approval of your loan request.