Business owners can use commercial second mortgage loans when their business is a bit short on money. This mortgage comes after the initial mortgage and takes a lower priority. Commercial second mortgage lenders are willing to work with qualified business owners.

If you want to apply for a commercial 2nd mortgage, you should be able to show that you are worthy of the loan. A good credit score, solid business plan and positive cash flow will go far in convincing commercial second mortgage providers that you can pay back your loan.

Remember the following things about commercial second mortgages:

1. Second mortgage commercial loans present a much larger risk to lenders. This means that they are more strict about who they lend money to. You may not qualify for the loan.

2. Because of the risk involved with a commercial second mortgage, there is often a high interest rate that you must pay. Consider the amount of money you will have to pay in interest before you get the loan.

3. You must create a plan for repayment. Try to show commercial second mortgage lenders how you plan to repay both loans. This will make them feel more confident about loaning you money.

Action Steps to Commercial Loans
The best contacts and resources to help you get it done

Compare commercial second mortgage rates of many companies

Because the interest rates on a second mortgage are often much higher than the initial mortgage, it's more important to compare rates to ensure you get the best deal. Use a website that allows you to receive quotes from several different companies by filling out a simple form.

I recommend: Submit the application at C-Loans.com. They can connect you with lenders for different types of loans, including commercial second mortgages. You can also compare loans on MortgageLoan.com.

Apply for a commercial 2nd mortgage through your bank

Your bank has a history of working with you, which may make them more likely to offer you a second mortgage. Try this option if you already have significant equity in your first mortgage and need money for repairs or expansion.

I recommend: Ask your account representative at Wells Fargo or US Bank if a second commercial mortgage is right for you. They will be able to discuss all of your options.

Look for alternatives to commercial 2nd mortgages when purchasing your property

One of the most popular ways to use a second mortgage is to make up the difference between the amount you have for a down payment and the amount the bank is willing to loan you. Banks are less likely to do this for commercial properties due to the higher rate of default. A mezzanine loan may be what you need.

I recommend: Unlike second mortgages, which have nothing to back them up, mezzanine loans rely on your business profits as collateral. The Commercial Lending Group and American Capital are two companies that may be able to help you out.

Tips & Tactics for Getting a Commercial Mortgage

Helpful advice for making the most of this Guide

• •  Once you are in a better financial position, try to consolidate your commercial second mortgage and primary mortgage into one loan. This often saves money and makes it easier to pay.