When You Are Seeking Commercial Real Estate Loans, Look for These Three Things

When it comes time to obtain commercial real estate loans for your start-up or growing business, there are a lot of things to consider and a lot of preparation to do. However, much of your decision making process will come down to these key things.

Getting a commercial loan for your start up or company expansion can mean everything to your business. But a lot needs to happen before you simply sign a loan agreement and get cash in hand. If you have the following three things in order, your process will go a lot more smoothly.

More often than not, your loan approval or rejection will come down to credit score, especially if you are working with a conventional lender such as a bank. They expect high credit scores and clean credit history. But don’t worry. You can still be successful in obtaining commercial real estate loans if you don’t have perfect credit or even if you have yet to establish your business credit. Sometimes you may need to consider an alternative lender that can help you get the loan you need without trying to get through all the red tape and hoop jumping of a traditional bank.

Considering your timeframe is another important factor. Lenders will want to know how long you’ve been in business and what your track record looks like in that time. Traditional lenders typically want businesses to be in operation at least a year or even two prior to approving a loan. This is because they are assessing and trying to mitigate their risk. They want to ensure that you will be able to pay back the money borrowed. There are still some cases in which lenders will work with a start up or a new company that’s only been in business for a short time.

Another key element lenders look at is your business’s current or projected revenue stream. Once again, they are trying to take as little risk as possible, so they want to be sure that if they lend you money, they are going to make money from this investment.

How to improve your chances of getting your commercial real estate loans approved.

Taking the aforementioned factors into account, there is a lot you can do to become more eligible for a successful loan application. For example, preparing a solid business plan takes a lot of the “questions” out of equation. You can showcase your business strategy, marketing plan, market analysis and a number of other thing to present your case that you will be able to make your company successful (and ultimately return the money borrowed).

Working with a lender can be a benefical way to ensure you get the loan you want with the rates you want.

Think of a lender as an expert on your side. They are there to help you through the unchartered waters of loan application and approval. They can help you understand what documentation you need and any other factors that will improve your chances of getting your commercial real estate loans approved.

Dennis Dahlberg
Broker/RI/CEO/MLO
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.

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