What does it take to qualify for a commercial real estate loan?
To qualify for a commercial real estate loan, be prepared to show the lender your business financials, personal and business credit scores, financial history, as well as a down payment of at least 20% of the property’s value.
Different lenders will have different requirements for commercial real estate loans. For example, online lenders tend to be more lenient, and may not require as large of a down payment. Banks, on the other hand, tend to have the strictest requirements.
If you’re applying for a commercial real estate loan at a bank, you should expect to have good credit, at least two years of business history, and a minimum of $250,000 in annual revenue.
Despite these differences among various lenders, there are still some common similarities. For example, solid credit, a high down payment, and a low loan-to-value ratio will almost always help you secure lower interest rates no matter what type of lender you work with.
It’s always best to be on the prepared side before you approach a lender. At a glance, here’s what you should expect to provide:
Business financials, including balance sheets, bank statements, tax returns, profit and loss statements, debt to equity ratio, cash flow history and projections, and debt schedule
Down payment of at least 20% or more of the property’s value
Personal and business credit scores
Legal documents, including business licenses and registrations
Financial history, including bankruptcy or liens
Keep in mind that a higher down payment will help keep both your interest rates and your monthly payments low.
If you need more information please contact
Peter Charland Jr.
KW Commercial Capital Markets
P (702) 803-2826 | E PJCharland@kw.com
6180 Brent Thurman Way #100 | Las Vegas, NV 89148