Are you a business owner who recently attempted to borrow money against your commercial property? If you are, you were probably shocked to see the results. Commercial investors charge high-interest rates because their tolerance for risk is far lower than consumer investors. Commercial investors are picky because they don’t have government loan protections.
When working with commercial investors, you may notice that they look further into a business than a consumer investor would. This is because they are searching for potential risks. They also ask questions about the way a business runs and may challenge business owners with difficult questions. Not only do they ask borrowers questions, but they also ask questions to themselves.
A commercial investor will ask themselves if a balloon payment is required. A balloon payment is a one-time payment charged at the end of a loan term. This payment acts as a way for the investor to know that a business is financially stable.
When asking for a commercial loan, know how much money you’re in need of before making a request. Lenders vary their terms depending on the amount of money they are lending. Commercial loans also take several weeks to close, so have patience during this process.
Commercial loans come with potential restrictions. For example, some lenders require the reporting of tax returns, cash flow statements, and other reports of positive business growth. Other lenders state that they can end a loan at any time and require full repayment at that time. Work with your lender to determine any restrictions or covenants before finalizing the agreement.
For help with your small business, seek assistance from Shop Commercial Mortgage. At Shop Commercial Mortgage, we can help businesses with commercial loans, so reach out to us at 813-368-9919 for additional details about our services. We look forward to hearing from you!
