A commercial property loan is a mortgage you take to buy or renovate a commercial property. Mostly, when applying for the loan, the lenders will require that you be the main owner occupying the property.
Your business should at least occupy 51% of the entire building you want to purchase before you get the go-ahead to apply for the loan.
Are You a Potential Borrower for Commercial Property Loans?
While these loans come in handy to help boost your business, they are only available to a select few who meet specific qualifications.
So, who are the potential borrowers of commercial property loans? Let’s find out below.
- Business Owners with Good Business Credit
One of the most important things your lender will want to look at is your business’s credit score. If you have a great score, you’re on your way to getting your loan faster than a business with bad credit.
Your business credit information is important in gauging how much money the lender will give you, the interest rate you’ll pay, the payback period, and the amount of down payment you need to make.
If you have an excellent business credit score, you can rest assured that you’re already a few steps ahead of succeeding for your commercial property loan.
- A Business with Substantial Property
As a business, the property value you present when applying for a commercial property loan goes a long way into determining whether you get the loan or not. The lender will be financing your property only after checking the property value and ascertaining it could work as collateral for the loan you are asking for.
In practical terms, your small business needs to occupy at least 51% of the entire building. If yours is short the required percentage, you should consider applying for an investment property loan.
- Business Owners with Excellent Personal Credit Scores
If you’re running a small company as a sole proprietor, banks and other commercial lenders will always seek to know about your credit score. Your business is directly linked to your financial decisions and transactions in the past. Any debts you incurred in the past will affect how you progress into securing your new property loan.
Even if you cleared all your loans in the past, the lender would want to know whether you struggled to clear them or did it effortlessly on time. They’ll go ahead to check to find out if you’ve had financial challenges in the past such as tax liens, foreclosures, court cases, and more.
You should be worried if you have a low personal credit score as this could frustrate your efforts of securing whatever type of commercial property loan you need.
The Bottom Line
Acquiring a commercial property through a commercial property loan is an effective way of achieving your business dreams. You no longer have to save money for years to accumulate enough funds for acquiring your dream commercial property. At blakemortgage.com we will help you achieve your financial dreams of acquiring a commercial property of your choice. You can always step in for your next loan anytime you need help.