Retail Property LoansRetail 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 LoansFor 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 LoansThe 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.
Retail Property Loans
What are Retail Property Loans
A commercial loan is a form of debt-based funding arrangement that takes place between a business and a bank. Used for funding major capital expenditures and other expenses or operational costs that the company couldn’t afford, commercial property finances are the best option. Under a commercial land loan, the bank issues the loan to the borrower where the borrower needs to pay back the principal loan amounts, interest, or any other applicable fees within the mentioned time duration.
At Custom Mortgage, all our commercial loans services are backed by a team of specialists who have years of experience in the commercial property financing industry.
How to Qualify for a Commercial Loans?
Commercial loans programs are provided by medium to large banks or other financial institutions. The borrower needs to have a strong profile with a credit score of 680 or above, minimum $250,000 in annual revenues and for the businesses who have a good experience in that industry. Moreover, these loan programs demand some degree of collateral to be pledged against the loan in case of default.
After checking the eligibility parameters and available options for commercial financing, you must choose the best loan program for your business needs. You can connect with our experts to discuss your requirements and decide that which commercial property finance program is best for your business needs.
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Assets used to collateralize commercial loans include:
– Real Estate
– Receivables from bills
– Equipment or supplies
The majority of the startups, as well as large businesses, go for commercial land loans or fund other business initiatives including- purchasing equipment and inventory, and all other regular business activities. Luckily, today there are many alternatives available for people to go beyond the traditional banks and other sources to get a commercial loan.
Due to the difficult eligibility criteria and other parameters in traditional loans, people are taking other alternatives as mainstream and even many borrowers have made commercial loans their first priority. Custom Mortgage is a leading vendor that assists people around the globe with financing services including commercial property finance, commercial land loan, commercial lending, and a lot of other services.
Common Types of Commercial Loans
Commercial Property Loan
Never one-size-fits-all, these kinds of loan programs vary from lender to lender and borrower to borrower while depending on various parameters including- terms, rates, uses, and so on. Out of the wide range of commercial loan programs that are available today, you can choose the best one that fits your requirements and for which you are eligible.
In contrast to other financing programs, hard money loans directly come from private investors who take the lending risks depending on the commercial property, while ignoring the credit rating of the borrower who is seeking the loan. This loan program has the loan term of 6-24 months and an interest rate of around 10% to 18% with high-upfront fees.
Interest-only Payment Loan
Commonly referred as “balloon loans,” these loan programs are the best fit for the ones who expect a large payout in the future instead of a steady revenue at the outset. Payments will occur on the lower interest rate, having a full balloon payment due at the end of the term. Borrowers who wish to build up, or construct a commercial property with a plan to refinance the end-term sum later can go for an interest-only payment loan.
Going for a home mortgage, borrowers like to fetch benefits of lower interest rates from a commercial property loan. Refinancing can fuel profit flow via improving or expansion of commercial properties, it even helps to pay off looming expenses, similar to the final payment on an interest-only loan.
Long-term Fixed Interest Loan
The interest rates on commercial property loan generally ranges between 4.75% and 6.75%; while it may vary with market trends and go slightly up and down. In this loan program, the interest and payment will remain static.
A bridge loan is a softer form of hard loan and has a lower interest rate of 6.5% to 9% and longer terms and short approval to funding wait of around 15 to 45 days. Borrowers must have a credit score of a minimum 650 and must be able to cover a 10-20% down payment.
Construction loan programs that covers the material and labor costs for building a property structure like offices, retail fronts, and so on. In case an undeveloped piece of land is already purchased, it can be used as collateral for the construction loan. These loan programs range from 18 to 36 months.
In a commercial real estate, borrowers can fold numerous properties into single financing arrangements. Like if a person has eight properties covered under a blanket loan and plans to sell two out of them, he can do that without incurring penalties and therefore use the profit to invest somewhere else.
Commercial Loans and Property Financing Overview:
If you are looking for expansion of your business, or the cost of renting business premises has become too high, you should consider applying for commercial loans.
Ultimately, the choice of fixed or variable rates will depend on the free cash flow your business generates once you have paid all of your expenses, including any previous commercial loan payments.
If the real estate increases in value, your capital will be increased and commercial mortgage interest will be tax deductible. Borrowers can borrower the down payment for a commercial property from investors who base the financing on the company’s shareholding dividends or income. If your company is not regularly certified by one of the larger CPA companies, you can opt for a loan with a slightly higher interest rate and no income verification.
You are at a disadvantage if you are looking for financing small businesses for a retail, service or hospitality company, especially if you are looking for funding to start up a business. If you do not have a credit history or collateral due to divorce or are a new immigrant or because you are young, or because you have poor creditworthiness, Custom Mortgage hard money programs and sub prime Commercial property mortgages are available.
Despite the guarantees provided, most programs will also require a General Security Agreement (GSA) on ownership and all corporate assets. If you want a commercial real estate mortgage but have not been in business for long, niche programs we offer can be your best bet, because these programs are often available for shorter trading periods and have lower Debt Service requirements (1 DSCR).
Custom Mortgage will look more closely at your previous experience in investing in commercial real estate, when underwriting your commercial property financing application. Our hard money-based commercial property financing options are considered short-term loans that are used for the purchase and sometimes renovation of a commercial real estate used by the owner for refinancing to a long-term mortgage.
During our underwriting process for commercial property financing, Custom Mortgage requires you to submit regular financial reports in good time. After sending us all the documents and understanding what you want, we will search for the best program that you may qualify for with your credit on commercial real estate with favorable terms at competitive interest rates.
In most cases, even if you provide a brief summary, you must have a complete business plan in place as soon as we request it. If you are thinking of refinancing commercial credit, you can simply take care of lowering your interest rates.
Have you been looking for financing opportunities for your new business plans, are you looking for a loan to expand your existing business, are you in a precarious situation with unpaid invoices and are you not sure where or where to turn?
While qualifying for financing is usually easier for big, well-established businesses, some smaller businesses may be eligible for commercial financing from the Small Business Administration (SBA). The SBA may provide either financing or insure a lender who takes a risk on a business to supply fund. Businesses can seek the assistance of Custom Mortgage in structuring and sourcing of commercial fund. We provide the following types of loans.
Retail Property Loans Loan Territories
|AK||Fairbanks||Fairbanks North Star|
|CA||Agoura Hills||Los Angeles|
|CA||Beverly Hills||Los Angeles|
|CA||Chula Vista||San Diego|
|CA||Costa Mesa||Orange County|
|CA||Daly City||San Mateo|
|CA||El Cajon||San Diego|
|CA||El Monte||Los Angeles|
|CA||Long Beach||Los Angeles|
|CA||Los Angeles||Los Angeles|
|CA||Marina Del Rey||Los Angeles|
|CA||Rancho Cucamonga||San Bernardino|
|CA||Rancho Palos Verdes||Los Angeles|
|CA||Rolling Hills Estates||Los Angeles|
|CA||San Bernardino||San Bernardino|
|CA||San Diego||San Diego|
|CA||San Francisco||San Francisco|
|CA||San Jose||Santa Clara|
|CA||San Mateo||San Mateo|
|CA||Santa Barbara||Santa Barbara|
|CA||Santa Clara||Santa Clara|
|CA||Santa Clarita||Los Angeles|
|CA||Santa Cruz||Santa Cruz|
|CA||Santa Maria||Santa Barbara|
|CA||San Marino||Los Angeles|
|CA||Santa Monica||Los Angeles|
|CA||South Gate||Los Angeles|
|CA||West Covina||Los Angeles|
|CA||Westlake Village||Los Angeles|
|CO||Colorado Springs||El Paso|
|CT||New Haven||New Haven|
|DE||North Star||New Castle|
|FL||Boca Raton||Palm Beach|
|FL||Palm Beach||Palm Beach|
|FL||Port Saint Lucie||Saint Lucie|
|FL||West Palm Beach||Palm Beach|
|LA||New Orleans||Orleans Parish|
|MO||Saint Louis||Saint Louis|
|NV||North Las Vegas||Clark|
|NY||New York||New York|
|TX||El Paso||El Paso|
|UT||Salt Lake City||Salt Lake|
|VA||Virginia Beach||Virgina Beach|