How to Qualify for our Best Rate Commercial Loan Programs

Traditionally, major banks are very tough on commercial loan applications, making the dream of owning real estate for your business far from reach. If your application happens to fit traditional bank financing models we can help by working with one of our Best Rate Lending Partners who offer competitive commercial real estate loan rates and easy loan approval.

Our Best Rate Lender Partners compete with the major banks to offer you the best commercial real estate loan rates with easy loan approval. You will find our approval process easier, our turn around time faster, and our documentation requirements lighter than traditional bank lending.

If your application doesn't quite meet bank standards, you will find our Best Options program will help you realize those dreams.

Here are a few parameters that traditional banks are generally looking for when assessing a commercial real estate loan application:

Down payment/Equity Requirement:
Whether you are purchasing or refinancing a commercial property, banks will be looking for 35-50% down payment or equity depending largely on the property you intend to finance.

Cashflow Requirement:
Generally speaking the banks are looking to see that the leases or lease over the building will cover the mortgage and all expenses associated with the building by 1.2 - 1.3 x cashflow coverage. (I.e. if the mortgage costs plus expenses are $10,000 per month, the banks will be looking for operating revenue of $12,000 - $13,000 per month).

Net Income Requirement:
If your building is or will be owner occupied by your own business the banks will be looking to see evidence that the net profits and cashflow of your existing business by way of three years accountant reviewed financial statements will easily cover the new mortgage costs plus additional cashflow coverage.

Documentation Requirements:
Generally speaking the lender will be looking for an appraisal, and environmental phase I analysis, three years' accountant reviewed financial statements of your business (or three years' cashflow of the building), a tenant rent roll of the proposed property, and a detailed cashflow of revenue and expenses of the proposed property. They will also want the personal guarantee of the principals of the company (both the holdco and/or the operating company). This means that as a principal of the company you will have to give full personal financial disclosure and permission for the lender to pull a personal credit bureau. Often the lender will also pull a commercial credit check on the business.

Pricing and Costs:
If you happen to meet all of the requirements of the Lender, you will be looking at mortgage rates that are close to discounted residential mortgage rates for 5 year terms, and from Prime to Prime + 1% for variable rates. The loan fees are typically around 1 - 1.5% including application, acceptance, and Lender fees. The appraisal will cost $2500 - $3,500 or more, depending on the property. The environmental phase I analysis will cost approximately $2,200 to $2,500. Legal fees to complete the transaction will run from $2,500 to $3,000 for the lenders representative (borrower pays) and an additional $1-$2,000 for the borrower's representative.

Approvals:
Where a traditional bank may have the above tough guidelines to meet, our BizWiz Best Rate Partners can offer competitive commercial real estate loan rates with less down payment on a low documentation loan, which means easy loan approval and less hassle on your documentation overview.
Timing: Generally speaking we can get a conditional letter of offer from the Lender within 3 business days of receipt of your loan request together with some basic information: detailed information about the property by way of MLS listing and rent rolls and solid financial information from the borrower. The appraisal and environmental reports will take another 3-6 weeks depending on market circumstances.