Buying commercial property is a great investment, but most buyers require financing to complete the purchase. Fortunately, there are a range of commercial property loans that can help you achieve your dream of becoming a successful property owner.
However, you must make the right selection to secure the best possible financing for your needs. Here are a few loan options and what they entail.
Types of commercial real estate loans
For current property owners, it may be possible to secure a line of credit by borrowing against the equity of the property. You can also consult with your current bank for a loan since you have an existing relationship there.
In the event you cannot acquire a loan through your bank, you can also consider an SBA loan. For instance, the SBA 504 Loan Program can assist buyers in procuring commercial property, but funds can also apply to building a new property, or even renovating an existing one.
How to qualify for financing
Regardless of what type of funding you pursue, you must take the right steps to improve your chances of acquiring the best form of financing for your needs. When it comes to loans, lenders have specific criteria that an applicant must meet, including their level of income.
In this case, the lender may request information like your W-9, business and personal tax returns, and business structuring information, along with other documents. The lender is also likely to check your credit score, which should be between 660 and 680 to ensure you qualify for the loan.
Lenders can also look for other criteria depending on the type of financing you prefer. By performing research and due diligence, you can greatly improve your chance of becoming a commercial property owner.