How to Apply for Your Commercial Real Estate Loan

Entrepreneurs that are growing their businesses often find that they require a commercial real estate loan to purchase an existing property or to access permanent financing on recent construction. Owning your own building comes with unique benefits, including tax deductions and the opportunity to sublease part of your new building. While it may seem like a difficult and complex process, getting a loan is simple when you work with a loan broker. The following is what you need to do to get a real estate loan to get your business situated in your own building and how working with a loan broker can help you find the right financing. 

Investment Opportunity 

Commercial real estate is an investment opportunity for owner occupied buildings. When you own the building you operate your business in, you’re planning for future growth. Owner occupied buildings are eligible to receive a Small Business Administration loan, also known as an SBA 504 . This will further boost your abilities to jump-start your business and work towards your goals. Another benefit to this is that the maintenance costs are tax-deductible, which can save you money.

Time Requirements

There are certain time requirements for seeking long-term commercial real estate financing. The first step is finding a loan broker that is not only reputable, but can fit the specific needs of your business. They will take time out to evaluate your loan requirements and decide if they want to move forward before you apply and start getting dings to your credit rating as potential lenders pull your credit rating. You may have to be in contact with multiple loan brokers before you find the right fit. Once you find a loan broker that is willing to work with you, they will need time to find a source to provide you with the loan. The time that this will take will depend on the amount of the loan that you need, your credit score and the industry that you’re interested in making your way into. However, there is a way to speed up this process through an alternative method.

Bridge Loans 

Bridge loans can provide you with an opportunity to close on a loan quickly if you’re confident that long-term financing will close after the waiting period. A bridge loan is a short-term loan that is designed to provide you with the financing that you require while waiting for a long-term loan. These loans will help you bridge the gap during the waiting period, and allow you to take possession of your new building as soon as possible. Bridge loans will typically have higher interest rates due to the higher risk that is involved. 

Benefits of a Loan Broker 

There are several benefits of working with a loan broker to fund your commercial real estate acquisition. 
 

  • They understand profit and loss reports: A profit and loss report shows your total income and total expenses over a certain period of time. These can be difficult to evaluate, and a loan broker can explain aspects of the report that you may have missed. You can take advantage of the knowledge that they provide you about these reports to cut costs and run your business in a more cost-efficient manner. 
  • Matching to the right lenders: A loan broker can match you to the right lenders that know your sector. Working with a lender that isn’t familiar with your sector can be a hassle and may require additional effort. Being matched with a lender that knows the ins and outs of your industry, as well as what it takes to succeed can provide you with massive benefits. 
     
  • They can suggest opportunities: A loan broker can suggest prime opportunities so that you can get the most out of your real estate acquisition. They can also assist you in finding more funding when the time comes for you to expand your business. 

Choosing a Loan Broker 

There are several considerations that you should keep in mind when deciding on a loan broker. A loan broker that specializes in finding loans for business owners that work in your industry will be much more suitable than a loan broker that works in a different industry. They will have existing connections to lenders, and this will speed up the process of securing a loan. Compare the fees of each loan broker that you’re considering. While you may think it will be in your best interest to choose the least expensive loan broker, consider their reputation in the industry as well as the time that they estimate for the loan to be received. Lowest cost = lowest consideration. And, check online reviews to learn about other borrower experiences. 

Contact Us About Securing Your Commercial Loan 

If you’re ready to expand your business through a commercial real estate loan, talk with our loan brokers today. We partner with lenders nationwide to provide access to capital when it’s unavailable through traditional means. We work directly with business owners to provide guidance, to position businesses for borrowing, and to source access to reputable lenders. Visit our profile and reach out to us to start  a conversation! 

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