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Commercial Real Estate Loans and Financing Lenders Division | $100,000 to $200,000,000 and Up
Commercial Real Estate Financing Loans - Lenders With Fast Approvals and Funding
Commercial Loans Lenders- Lenders on small to large Commercial Real Estate Loans are available for financing most enterprises imaginable. We offer easy and fast qualifying programs available on most types of property. Commercial lenders for real estate financing loans make it easy.
Types of Commercial Real Estate Financing Loans and Lenders
Commercial Loans Lenders
The following list will help you identify the types of information a banker will need to make an informed decision about your business:
- Three years income tax and financial statements
- Year-to-date profit & loss and balance statement
- Personal finance statements
- Projected cash flow statements for next 12 months
- Pro forma for next 12 months / length of loan
- Federal and state tax information
- Collateral sheet
- Well written business plan
Limited Verification and Business Income Programs available in some cases!!
Commercial real estate financing loans are underwritten by lenders on a case by case basis. Every loan application is unique and evaluated on its own merits but there are a few common criteria lenders look for in commercial real estate loans and financing packages.
A key component in making an underwriting evaluation is the debt coverage ratio (DCR). The DCR is defined as the monthly debt compared to the net monthly income of the investment property in question. Using a DCR of 1:1.10 investors say that they are looking for a $1.10 in net income for each $1.00 mortgage payment. Typically, they will determine the DCR ratio based on monthly figures, the monthly mortgage payment compared to the monthly net income. The higher the DCR ratio is the more conservative the lender. Most of them will not go below a 1:1 ratio (a dollar of debt payment per dollar of income generated). Anything less then a 1:1 ratio will result in a negative cash flow situation raising the risk of the loan. DCR’s are set by property type and what an investor perceives the risk to be.
Today, apartment properties are considered to be the least risky category of investment lending. Because of this, they are more inclined to use smaller DCR’s when evaluating a loan request. Make sure that you are familiar with a lender’s DCR policy prior to spending money on an application. Ask them to give you a preliminary review of the investment property that you want to purchase. Information is free, mistakes are not.
Loan to Value:
Unlike residential lending, investment properties are viewed more conservatively. Many lenders will require a minimum of 20% of the purchase price to be paid by the buyer (or 10% down with seller financing 10%). The remaining 80% can be in the form of a mortgage provided by either a bank or mortgage company.
Decent credit is usually required, however some investors offer credit challenged borrowers programs at higher rates.