How Co/LAB Lending Operates With A Commercial Loan

How Co/LAB Lending Operates With A Commercial Loan

November 9, 2023 (6 months ago)

UNLOCKING COMMERCIAL FINANCE: A DIVERSE LANDSCAPE

Did you know that when business owners and real estate investors apply for financing at their local lenders, 50% of them face denials, turn away, or approvals below their sought amounts? In this video, we delve into various commercial loan types, discussing terms, rates, payments, and the unique process of applying for a commercial loan. Melissa Mueller, a commercial and residential loan officer, guides us through the intricate world of commercial financing.

NAVIGATING COMMERCIAL LOANS: A MYRIAD OF OPTIONS

Let’s start by exploring a handful of commercial loan types. From SBA loans comparable to FHA and VA in residential lending to HUD loans for refinancing debt with higher loan-to-value ratios, and construction loans for development, the landscape is diverse. Bridge loans provide short-term financing, while hard money loans offer quick cash for property closing. Whether fix and flip, or rental loans for property leasing, the array is vast, differing significantly from traditional 30-year fixed mortgages.

DECODING COMMERCIAL LOAN WORKINGS: IT’S ALL ABOUT RISK

If you’re accustomed to residential mortgages, commercial loans operate on a different set of criteria. Lenders scrutinize your experience with properties, credit, cash flow, and reserves. The commercial loan pre-approval process is distinct, emphasizing upfront preparation and planning. Commercial financing often requires a down payment, with loan-to-value ratios demanding capital investment. However, SBA loans provide an avenue for lower down payments, especially for business owners aiming to occupy the purchased property.

COMMERCIAL LOAN TERMS: A GAME OF LINKS

The terms of commercial loans vary based on the loan type and lender. Local lenders may offer 15-year amortized loans with a five-year ARM or balloon payment. However, engaging a commercial broker opens doors to extended options, including 30-year amortization or interest-only choices. Managing commercial loans wisely is crucial, considering the implications of balloon payments and refinancing requirements.

COMMERCIAL RATES UNVEILED: CALCULATING THE COMPLEXITY

Commercial interest rates differ from residential rates, calculated based on the lender’s cost of funds. The calculation involves taking an index and adding a spread for loan size, credit score, and loan duration. Commonly used indexes include the prime rate, LIBOR, and the swap rate. Understanding these intricacies is essential for anyone navigating the realm of commercial financing.

PROPERTIES ON THE COMMERCIAL LOAN CANVAS: LIMITLESS VARIETY

Commercial loans finance a broad spectrum of properties, from single-family rentals to large apartment complexes, land for development, business buyouts, auction properties, mixed-use spaces, warehouses, restaurants, and auto dealerships. Finding a lender aligned with your property type is crucial for successful financing. The versatility of commercial loans provides a myriad of opportunities for portfolio expansion and property acquisition.

GUIDING YOUR COMMERCIAL FINANCIAL JOURNEY: EXPERT INSIGHTS

For those seeking to expand their portfolio or delve into commercial financing, understanding the process is key. Melissa Mueller invites questions and offers guidance in the comments section. To explore further and determine your eligibility for discussed commercial loans, schedule a consultation through the link in the description. Your journey to commercial financial success starts here.

JOIN OUR COMMUNITY: STAY TUNED FOR MORE INSIGHTS

If this information resonates with you or someone you know, share the video, subscribe, and ring the bell for notifications. Your feedback is valuable, so drop your questions in the comments. Explore our channel for more insights on residential and commercial financing, and stay tuned for next week’s video.

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