When it comes time to get obtain commercial real estate financing, there is a lot to prepare for. Discover the four most important things you should do to prepare for getting a loan.
Now that you have determined that you need a loan to get your business off the ground or take your existing company to the next level, you need get ready. The loan process can be daunting and challenging, but there’s no need to be intimidated. Follow these four tips to get yourself prepared.
Check your credit score. Let’s face it – a good credit score goes a long way towards approval of a commercial real estate financing loan. Get your credit report from a trusted source such as Experian or TransUnion. These are credit bureaus that can give you the most up to date FICO score so you know where you stand when it comes to your credit. Banks definitely look for a high credit score – around 700 or higher. If you are in that echelon, you will have a much easier time getting approval (especially as a new or start up business) and obtaining favorable terms from your lender. If you don’t have perfect credit, you can still obtain a loan from an alternative lender.
Another thing that lenders consider is how long you have been in business. Most lenders will want to ensure you have been in business for a year or two before they “risk” loaning you money. However, there are several lenders that are more lenient about this timeframe. That’s why it’s important to have a solid business plan. If you can convince a lender that your business idea is strong enough to make money (even if you are not yet in business), you can increase your chances of getting approved for a loan.
Your business plan comes in handy in more ways than one.
Your business plan is an instrumental tool in persuading a lender that he or she can take the risk on approving your commercial real estate financing. Once you have that and a business license, you have proven that you are serious about your commitment to the business’s success.
You should be prepared to present collateral to obtain a loan.
Whether you use the business’s commercial building, your company’s equipment or even your own car or home equity, you will likely need collateral to get commercial real estate financing. When you meet with a lender, he or she can help you understand how these four things are crucial in getting a successful loan application approved. You may need to do a little prep work to put these four things into place prior to applying for a loan, but once you have your “ducks in a row” it’s a lot easier to enter into the loan approval process feeling prepared. So what are you waiting for? Getting ready to take your business to the next level starts now!
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.