Commercial Mortgage Lenders | How-to Guides for running your business from Business.com

If you want to buy or expand an office complex, warehouse or retail building, you need a commercial mortgage. Commercial loan rates can vary considerably based on the amount, duration and type of loan as well as on the lender. That's why it's so important to choose the right commercial mortgage lender. Doing so can help you:

Secure financing to buy or expand your business property.
Secure a long-term location without rental rate hikes.
Profit from the increase in value of your business property.
Secure a mortgage loan at a favorable rate and term.
Increase your tax deductions.

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

Prepare your financials

Commercial mortgage lenders want to see hard evidence that you can repay the loan, including financial statements, balance statements, profit-and-loss statements, projected cash flow statements and more. Lenders may want to see a business plan as well as background information on you and your partners.

I recommend: Keep this commercial loan readiness checklist handy so you know which financial statements to prepare. Download a sample balance sheet and a profit-and-loss statement from UrgentBusinessForms.com, which also sells templates in Excel, PDF and Word formats. A downloadable template for cash flow projections is available from 1000Ventures.com.

Know your ratios

Most commercial mortgage lenders require certain percentages for three important ratios: debt service coverage ratio (DSCR), loan to value ratio (LTV) and debt ratio. DSCR is the net operating income divided by the mortgage payments. LTV is the total loan amount divided by the fair market value of the property. Debt ratio is determined by dividing your monthly debt obligations by your monthly income.

I recommend: Keep abreast of commercial loan rates and use the debt service calculator courtesy of CommercialBanc.com to estimate your DSCR.

Shop for mortgage lenders

The commercial mortgage and commercial lending market is crowded with bankers and commercial mortgage brokers eager to place your loan. Choosing one requires careful consideration of rates, terms, duration, down payment and other conditions. Often the bank that handles your business checking accounts may be willing to offer you a commercial mortgage loan at an attractive rate or with favorable terms in order to get more of your business.

I recommend: Among the big banks that offer commercial mortgage loans to small businesses are Wells Fargo, Citibank and Wachovia, which allows you to apply online. Among the numerous online services that help you shop for commercial mortgage loans are iBank and Businessfinance.com. Fill out a short online form at BuyerZone.com to receive quotes from several commercial mortgage lenders.

Negotiate a deal and close the loan

Choose two or three lenders that seem to offer the best deals and most closely match what you need. Negotiate with each one, letting them know that you're shopping several other sources. Having options gives you at least some leverage in the negotiation process. Once you have decided on your top pick, proceed to finalizing your commercial mortgage loan. It's wise to use an attorney to review the loan documents and make sure your interests are served and protected. Your attorney can also help walk you through the closing.

I recommend: The Capital Consortium offers a number of sample mortgage loan documents online for review. Find an attorney who specializes in real estate at AttorneyPages.com.

Tips & Tactics
Helpful advice for making the most of this Guide

Learn from rejection: If you get rejected for a commercial mortgage loan, find out why and try to remedy the shortcoming. Then apply again, perhaps with a different lender.
Watch for balloons: Commercial mortgage loans are often for periods of 10 years or less, with the entire remaining amount due at the end of the term as a balloon payment. Be prepared to refinance or pay off the balance.
Down payments required: Most lenders require at least a 20 percent down payment on a commercial loan.
Look for hidden costs: Extra loan fees and costs can add up. Lower-interest loans can sometimes cost more because of extra fees and charges.
Keep your credit clean: If you have other business credit lines, keep them up to date and out of trouble. Any bad credit marks can make mortgage lenders leery.
Pay attention to restrictions: Mortgage lenders will sometimes impose restrictions on the use of your property as a condition of the loan. Be sure to ask about any restrictions and make sure that you agree with them.

The official source of Commercial Mortgage Lenders is
the Commercial Mortgage Lenders page at Business.com

More Featured Listings

Make Commercial Real Estate Loans Simple
Providers of customized commercial lending and loan services for investors across all markets. Hundreds of loan programs – apply online today!
Brokers | Rate List | Contact Us | Apply Now
www.clcnationwide.com

Receive an Instant Mortgage Rate Quote
Get an Instant Mortgage Rate Quote for Your Business or Commercial Property. "Common Sense" Underwriting, Low Rates, Fast Closing. Contact us Today!
Low Rates
www.cmcmutual.com

Compare Commercial Mortgage Quotes
Compare competitive commercial mortgage quotes from multiple lenders. No obligation. Check your options, rates and payments and save.
Free Quotes | Compare Lenders | Find Low Rates
www.AllOptions.com

Commercial Mortgage Lenders Resource
Find Commercial Mortgage Lenders. Search listings and reviews of retailers, specialists and services in your local area now.
JustClickLocal.com