Financing Your Commercial Property
American Atlantic Mortgage is a full service Commercial Mortgage Brokerage Company that can assist you with the purchase or refinance of any commercial property. Our brokerage operation has access to hundreds of lenders for all types of commercial properties.
The financing of a commercial property can be a very involved and complicated process. We are ready to guide you through the commercial loan process. Most lenders want to know about you, the borrower, and the business that you are purchasing, equipment leases or refinancing. As a general rule, lenders follow the following formulas to consider your loan.
Unlike "residential loans," the focus for commercial loans is "Debt Coverage." Lenders look at the four "C's" of Credit… Cash, Credit, Collateral and Character. Each of these factors plays a important role in your ability to get financing.
Commercial lenders look at both the individual and the property. A good way to understand the underwriting of a commercial loan is by thinking of the four "C's." Each of these factors plays a fundamental role in your ability to acquire commercial financing.
The four "C's" apply to you personally and to the business you wish to purchase or refinance.
CASH: You must have sufficient cash, commonly referred to as "equity" to arrange financing. Typically this is in the 20-50% range.
CREDIT: Your credit must be excellent your credit is determined by your personal credit score and the financial health of the business you are purchasing.
COLLATERAL: You may have to guarantee your loan with such things as stocks, bonds, 401K's, investment real estate and other assets as security for the loan with your personal signature.
CHARACTER: Your character must be sound and your background must demonstrate the experience, education and ability to be successful in your business venture.
Work out Loans: Often time’s lenders understand your need to work out of a difficult situation. Of course, should you secure such a loan, you will pay a higher rate for this type loan because lenders would consider this type of loan to be a higher risk.
Business capital is the most important thing you can conserve. Lenders often use the review of your loan application to see if you fit their lender criteria for a loan. Not all lenders underwrite a loan the same way nor use the same standards. This is why it is important you deal with a reputable broker who can get your needs in front of several lenders instead of just one.
Business Finance is the act of understanding the “capital needs” of your company. The best way to complete a review of your needs is to complete a business plan which should include a cash flow reports of what you think will happen in the immediate future of the business.
Business Loans are made up of a number of different categories. There are loans against your receivables called, “factoring”, loans against your inventory, and loans against real estate. Promissory loans are just that, …a promise to pay back what you have borrowed back with your simple “promise” …nothing more.
Equity Loans where the lender puts the emphasis on becoming a partner with you in the project. Put another way, the lender puts up the money and then shares in the profits of the deal.
Hard money loans come from lenders who are more interested in using your collateral as the basis for the loan. Lenders don’t really look at your credit all that much. They are looking for situations where the value of the collateral (land and building, for example) is no more than 60-65% of the loan you are requesting.
Leases are a form of financing where the Lessor (the user of the property) receives a bundle of rights from the Lessee (the owner of the property). These rights are paid for on a monthly basis via lease payments.
Funding a loan is the act of actually providing the agreed to funds after the loan has been approved.
Franchise loans are usually one of two types …money offered by the Franchiser to entice the purchase of the Franchise Opportunity or money provided by third party lenders to assist in the purchase of a Franchise. If the franchise you are seeking is properly registered with the U.S. Small Business Administration, your chances of receiving a loan to purchase and operate the Franchise are much better. SBA guaranteed lenders like the fact that there is a plan in place to help you succeed.
Documents You Will Need For Your Loan
Personal Documents (Click Here)
Business Documents (Click Here)
Loan Application (Click Here)
Types of Commercial Financing Available (Click Here)
Overall, whether you are seeking a secured loan (one with collateral) or an unsecured loan (one without collateral) be prepared to provide the correct information to the broker/lender. The better job you do of record keeping, the quicker you will get the loan.
For all of your Business Loan needs, call on American Atlantic Mortgage to get it done for you! We have years of business experience in obtaining Business Loans, Business Capital, Capital to grow your business, Equity Capital, Franchise loans, Hard Money loans, money for leased properties, secured and unsecured loans, workout loans, SBA loans. We can get them funded. Why not give us a call?
American Atlantic MortgagePhone: (727) 797-1070
Fax: (810) 213-0244
Skype: Marine19565431
Licensed Mortgage Brokerage Business
2451 McMullen Booth Rd. STE #200
Clearwater, Florida 33759