Retail Property Loans

Retail Property Loans

Retail property loans are loans that are given to small businesses that want to expand their operations. As a business person, you can easily access the loan by either accessing the lending institution directly or by using a broker.

If you opt to go directly to the lending institution, you will come across technical aspects that maybe puzzling at first. The good side is that most of the language used is not difficult to understand and you can always discuss with your lender in case there are things that you can’t understand.

On the other hand, when you use the broker, you don’t need to understand most of the technical language. The broker will come with a readymade proposal that you only need to sign. Although, the brokers make your work easier, the main setback of the broker is that you need to pay them. This could be an extra expense on your side.

Qualifications for the Retail Property Loans

For you to qualify for the retail property loans, you need to satisfy certain regulations:

  • The property that you want to purchase must have high traffic potential. The property must have high visibility i.e., many people should be able to access the property. The more people that are able to access the property, the more money that you will make.
  • The property that you want to purchase must have direct access to the major highways in the area. Again this is to ensure that the property is easily accessible to as many people as possible.
  • Moreover, the desired property must have the potential to bring about profits. Properties that have great potential of reaping profits include: petrol stations, convenience stores, markets, groceries, restaurants and other business properties.
  • In addition to having a strategically located property, you must have a business with a proven track record. A money lender will be happy to fund a business that has been in operation for 2-3 years and has great potential for growth.

Properties of Retail Property Loans

  • As mentioned above, the loan is only available for property that is strategically located in an area where there is great potential for growth.
  • Most of the lending institutions offer a minimum of $500,000
  • If you want to get the loan using your property as collateral, the lending institutions will give you a loan that is 80% of the value of your property.
  • To access the loan, you must give proof that you are capable of paying the loan; you need to give out balance sheets, financial statements, operating statement and any other documents that demonstrate your ability to repay the loan.

Advantages of Retail Property Loans

The single most advantage of the retail property loans is that you will be paying a loan for a property that you now own. As a result of the loan, you will no longer be renting the retail space (if you were renting before).

Retail property loans are a vital component for any expanding business. Although, taking the loan will put you into debt, the value of the property that you will buy far outweighs the value of the loan.