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Need Money? Here’s How to Get the Commercial Real Estate Loan That You Need

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Over $89 billion is invested in the construction of new commercial buildings. As a business grows, an entrepreneur will need to roll with the changes this growth brings. Often times, the larger a company gets, the more room they will need to house new employees.

While most business owners put a lot of work into building their brand, they tend to rush through the selection of a new commercial building. Having a spacious and appealing building can help you stay on an upward trajectory.

Instead of trying to rent a new commercial space, buying a building is your best course of action. Not only is commercial real estate a great investment, but it can also help you set up a permanent base of operations for your business.

The key to buying the building you want is getting approved for a commercial real estate loan. While this may sound like a fairly easy process, it is anything but.

The following are some of the things you should focus on when trying to get a commercial real estate loan.

Preparing the Documents a Lender Will Want to See

Most business owners fail to realize how much documentation they need to be even considered for a commercial real estate loan. Before going in to meet with a lender, you need to find out what they will want to see. Usually, the lender will want to see things like up to date financial statement, bank statements and tax returns.

By having this paperwork ready to hand over, you can speed up this process a bit. You will also need to get together your asset and liability statements. If you have a number of assets, then it may be easier to get approved for a commercial real estate loan.

Failing to have this paperwork in hand during your first meeting with a lender can create lots of problems. Instead of making this process drag on, you need to get on the ball and get all of your documentation in order ahead of time.

Get to Know the Value of the Property in Question

Are you struggling to find a piece of commercial real estate that fits your needs? If so, consulting with a reputable and experienced real estate agent is vital. Once you have found the right property, you will have to assess what it is worth.

Knowing the value of the commercial property in question can help you get the ball rolling with your loan A commercial property can be valued in one of two ways. The first way these properties are valued is by comparing it to similar buildings in the area.

The second way commercial buildings are valued is by the capitalization rate. This rate takes the value of similar properties and divides is by the net income of the business. Working with a reputable lender like Assets America, Inc will help you figure out what loan is the best fit for your needs.

Present the Lender with Your Property Strategy

Some business owners think they can meet with a lender and get the loan they need on the same day. The reality is that this process is more of a hurry up and wait type of undertaking. Before a lender will approve your application, they will want to see some documentation about your business strategy.

This strategy will need to detail why you want the building and what your company’s long-term goals area. When you get this strategy developed, you need to avoid wavering on it in the future.

If a lender gets the feeling that the strategy you have presented to them is not concrete, they may be hesitant to provide you with a loan. This is why you need to take some time to iron out every detail of your strategy before presenting it to the lender.

A Lender May Want to See Your Corporate Structure Diagram

If your business is comprised of hundreds of employees, a lender may want to see a breakdown of your corporate structure. Getting a look at how your company is structured will help a lender figure out which members of a company will be in charge of paying back the loan in question.

An accurate and detailed corporate structure breakdown can actually reduce the time it takes to get approved for a loan. The last thing you want to do is let your lack of foresight and preparation lead to lulls during this loan application and approval process.

Going in and meeting with a few lenders beforehand will provide you with lots of information. With details on what a lender needs to see, you can get to work producing the right documentation. Delegating parts of this document prep process to your staff can help you get the timely turnaround you are after.

Work on Setting Your Own Commercial Real Estate Loan Terms

Inexperienced business owners often make mistakes when it comes to obtaining a commercial loan. Instead of waiting for the lender to set the terms of your loan, you need to go into this process with an idea of what you can pay. Doing your homework ahead of time can save you a lot of money and stress.

Usually, the terms a lender will set will present will have a higher interest rate and establishment fees. If you go into this process telling them about the rates you expect to get, it can help you get the affordable loan you are after.

Working with a Reputable Lender Is a Must

When trying to get the right commercial real estate loan, you need to focus on finding the best lender. Researching a lender will help you find out how much experience they have and what their past customers are saying about them.

Looking for more information on growing your company? Be sure to read our article on how to build a memorable business brand.

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