|
|
Conventional
Commercial Real Estate Loan
Requests
Examples
of how your requests may be declined and solutions we offer
Because we represent an extensive network of
Banks, Institutional Lenders, Private Investors and Non-Traditional
Programs, we are able to provide you with some of the most competitive rates
and most flexible programs available.
When we meet with you, in person or by teleconference,
our first task is to identify the requirements or conditions necessary to
qualify for conventional bank financing. From our decades of commercial
banking experience, we know how to quickly identify those
disqualifying factors that most often trip up the loan request.
Examples:
-
When your business has difficulty producing business
financial statements, Form 4506 or tax returns that will meet
DSCR standards
-
When your request is below the bank's minimum loan
amount. Yes, we service requests starting at $25,000 and up to
several million
-
When your
property type is not on the lender's approved list . Yes, our
program services
automotive, warehouse, restaurant along with the traditional multi family,
mixed use, office, retail and warehouse.
This page identifies some of those scenarios and
possible solutions:
|
Business and Personal
Tax Returns
After you have to produce two or three years of business and personal
tax returns, it is not unusual for an underwriter to find an issue
that disqualifies the request under the bank's lending standards. This
"issue" will often be inadequate net income, but when commercial loan
underwriters analyze income tax returns, there can be a wide variety
of other possibilities which produce the same disapproval.
|
|
Business and Personal Stay Separate
Very few
traditional commercial lenders use our
Stated Income
approach (no tax returns, no IRS Form 4506, no income verification)
for a commercial mortgage.
Simply put, you state the income provided by your outside employment
or the building rents. If there is reasonable income to cover the
commercial loan P&I and related property expenses, that's about it.
Of course, if you choose to provide more documentation to support your
stated income, that helps speed the approval process |
|
Cross Collateralization Requirements
The bank may not approve the commercial loan request without
additional collateral; often in the form of a lien on personal equity
in assets such as the commercial borrower's home. If that equity
amount isn't sufficient for the requested commercial loan amount, the
request may be declined
|
|
Stated Income / Asset Approach
The program helps the business owner avoid the unwise and unnecessary
connection between personal and business assets. The commercial
property stands on its own. The funding amount is based on the
appraised value of the property and the income that property produces. |
|
Special Purpose Property:
The request may be declined if the conventional lender does not
typically make commercial loans for the kind of business involved or
imposes special conditions that make the commercial property loan
impossible for the borrower. As one common example, fewer lenders are
providing commercial real estate financing for restaurants and bars.
Another example would be the auto services business which often is
given expensive (and often unnecessary) environmental conditions.
There are numerous "special purpose" properties such as golf courses,
churches, campgrounds, gas stations and funeral homes that traditional
banks will exclude from their commercial lending portfolio. |
|
Wider Range of Eligible Commercial Properties
Of course our network of flexible programs include stated income /
stated asset approach most commonly used for financing multi-family,
mixed use, retail and office properties.
|
|
Cash Out Limitations
When you refinance your commercial property loan and want to get
significant cash out, it is not unusual for a traditional lender to
restrict what the funds are used for and to severely limit the amount
of cash received. Even though the refinance is approved, if the
transaction won't generate the cash you required, isn't this similar
to rejecting the loan? |
|
Stated Income / Asset Approach
The stated income / stated asset commercial mortgage will permit more
cash out of a commercial property refinancing without significant
restrictions on what can be done with it. |
Call us at 1-800-503-1972
for your Commercial Real Estate Loan Request
|
