You’re searching for commercial real estate financing – what’s the best approach to take in contacting lenders?
Commercial lending is far less standardized than getting home financing and has a whole language of its own. You and the commercial loan officer will generally discuss the tenancy and income or the property if it is rented, and the property type, before getting into the borrower’s qualifications. The loan amount and terms you’ll obtain will vary greatly, depending on different property characteristics.
When you contact the commercial lender, try to have as much of the following information as possible available:
1) The sales price or estimated value of the property
2) The loan amount desired
3) The property type, including approximate age of the improvements, square footage, lot size, and in the case of apartment buildings, the number, size, and types of apartments, who pays utilities, and what the parking arrangements are. In the case of commercial properties, the tenancy, and when leases expire. If the building is occupied by or being purchased by an “owner-user” type of business/borrower, try to find out what the same space would rent for on the open market.
4) The income, and what expenses the owner pays.
5) The borrower’s credit, overall financial situation, and other properties are owned.
Lenders are interested in how much other property your borrower owns, and what, if any, experience your borrower has in managing the type of property being purchased.
6) If the property is owned by an LLC, Corporation, or other entity, be ready to
provide basic information about the financial standing of that entity, as well
7) If possible, try to find out what properties are adjacent to the subject property. This can help identify possible environmental concerns. (Relating to chemical seepage from adjacent properties.)
With this information, …