Private Lending for Small Business Owners and Commercial Landlords

Commercial property loans help fund purchasing, refinancing, or improving properties that are being used for business purposes. These loans can be used to buy office and industrial buildings, production facilities and warehouses, or any property that a business is using for their operations.

For anyone considering this type of loan, there are a few things worth knowing. First, commercial property loans are different from consumer loans. They have different requirements for collateral, underwriting, rates, and terms.

Also, lenders are often more cautious when issuing commercial property loans. This means that loans may require higher initial payments and higher interest rates than other types of loans.

Last, commercial property loans are often more difficult to qualify for than other loans. Lenders may look at financial statements from your business, but they will mostly consider the value of the property or building itself.

Despite some extra work required, commercial loans can be a great way to grow your business. By using a commercial loan, you can get ahead of your competition by expanding your operations, improving efficiencies, or relocating to a more advantageous location.

Some of instances when you might need a loan for commercial property:

• -Purchasing, constructing, or repurposing a property that your business will operate.
• -Buying an office, industrial, or flex building to locate your business.
• -Increasing space and capacity for your current production facility.
• -Buying a warehouse for inventory and logistics.
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Worth considering when searching for a commercial property loan:

• 1)  Fast-funding and low credit score options. If you need funding quickly or you have bad credit, there are special lenders that offer lending solutions that fit your situation, although sometimes these loans have higher rates and fees to compensate the lender for the increased risk.
• 2)  Current interest rates. Interest rates on commercial real estate loans are typically higher than interest rates on residential loans and home mortgages.
• 3)  Upfront Fees. Origination fees and application fees can differ depending on the lender and the size of the loan request.
• 4)  Documentation requirements. Lenders may require significant documentation like your business's financial statements and tax returns.
• 5)  Prepayment penalties. Prepayment penalties are fees charged by lenders if you choose to repay the loan before the full term is completed. 
• 6)  Personal Guarantee. Personal guarantees are common on commercial real estate loans; they are agreements where the borrower agrees to repay the loan even if the business should fail or go bankrupt.
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Despite the extra work, most companies, small businesses, and commercial landlords grow their bottom line through partnering with a trusted and competent lender.  Qualifying for a commercial real estate loan is different from other loans, but asset-based lenders like Anderson Capital will determine a value for the property.  Often the value of the property exceeds the income of the business, which can benefit the borrower and their business.