Investing in commercial real estate is a major commitment for any business owner. In most cases, the purchase is financed through a commercial real estate loan in Kalispell. Access to such a loan depends on a number of different factors that vary from one loan source to another. For example, lenders have requirements that need to be met before granting a commercial loan to a small business.
Necessary Cash Flow
Generally, a commercial real estate loan in Kalispell requires much more analysis than a residential mortgage. Providing financial support for a small business is quite a risk since many small businesses fail to succeed. Lenders look over books to ensure that a business has the cash flow needed for loan repayment.
Personal Credit Score
A small business is typically controlled by a single owner or just a few partners. Lenders check the personal history and credit scores for problems with finances in the past. This may include tax liens, defaults, court judgments, and foreclosures, just to name a few. A personal credit score that is low may limit the chance for loan approval for the company.
Characteristics of the Property
The financed property acts as collateral for the commercial real estate loan in Kalispell. The lender puts a lien on the property, which means that if repayment is not made on time, the property can be seized. Qualifying applicants may be required to occupy a minimum of 51% of the property. If you do not plan to occupy the property, you may need to consider a loan for investment property instead.
Commercial real estate loans are usually based on the value of the property being financed as opposed to the creditworthiness of the borrower. In general, it is only possible to secure a commercial real estate loan in Kalispell up to a maximum loan-to-value ratio.
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