Finding The Right Commercial Loan For Strip Malls
So you've decided you want to open a business. You've had a good look around at the options and decide to invest in strip malls. Now all you have to do is make up your mind where to go to get the investment needed to fulfil your plans. There are a lot of commercial lenders out there who are willing to invest in new businesses like strip malls. With so many of them offering "The best deals and lowest rates" just how do you find a lender that is going to meet all your requirements?
Firstly, not all commercial lenders will be willing to invest in strip malls, so you may want to go online, and use a search term like: commercial loans for "Strip Malls" and include your locality. This should bring you quite a few results to follow up on. You can then compare the kind of loans and the rates these companies are offering, before narrowing the search down to two or three you think would be most suitable. It's important that you find a loan option that is going to be the one most suitable for you and your idea of investing in strip malls.
It's also worth mentioning that you don't need to have perfect credit to obtain a commercial loan. The lender will view your strip malls potential profitability, and value as the main considerations of the loan. You may get a better interest rate however, if you also have a good credit rating. The loans offered will normally have fixed or variable rates whether you are looking to invest in strip malls or anything else.
You should make sure that the amount you want to borrow is one the commercial lender is willing to make, and one you can afford. Most commercial lenders have a minimum loan of between $100k and $300k while the maximum most lenders are willing to offer is usually around $10m mark, although a few of the largest lenders have no upper limit. Make sure that you get the amount you need for your strip malls or you could find yourself running out of money before the project is completed.
You should also make sure the lender you choose has as much enthusiasm and concern about making your strip malls venture a success as you have. They are going to want a return on their investment, so if you have an attractive realistic business plan, they may well view the strip mall loan as a good risk. They may offer you a good rate of interest or options to make sure that your business will takes off.
The location and appearance will also play a part in the assessment of the loan. Obviously if all the units are occupied this will be beneficial as well, as the income source is guaranteed. All strip mall loan applications are treated as unique, and the lender will send a loans officer to view the strip malls physical condition, it's strategic position and surroundings. Most lenders offer a (LTV) loan to value on strip malls that will not exceed 75%. The coverage of the debt the lender would want to see on properties like strip malls would be about 1.25 times the coverage.
The lender will also charge a fee, these fees vary, but 1% of the loan amount is a general guideline. The total processing time of your strip malls application will vary, but is normally between 5-10 weeks depending on your circumstances.
|About the author:|
David gaIan has been in the real estate business for over 10 years. Beginning with a single rental he now buys houses for cash, can stop foreclosure, and provides information for commercial properties. David gaIan is the owner and operator of houseoption.com a website dedicated to helping homeowners facing foreclosure and other house related problems. You are free to publish this article unedited on your site as long as all links back to us remain in tact. We Buy Houses
e-mail: david_commercial at houseoption.com