The properties involved in commercial real estate are considerably more expensive than regular real estate, which makes a careful selection among the available financing options even more important. The range of said options runs the gamut; your real estate clients can find acceptable terms with either private financiers or the giant financial institutions that function as traditional lenders. We’ll take a short look at each in turn.
The Skinny on Private Loans
As pertains to private loans for commercial real estate financing, there’s a lot more variability – which is attractive if your credit history is “unconventional.” There’s a lot more negotiation available between you and the lender, and an offer is tendered if you can agree. Primarily, the entire process can be a good deal faster than with traditional forms of lending, due to the absence of an extended qualification check. Lastly, private loans often have far fewer administration costs than bank loans.
On the flip side, you should expect higher rates of interest due to the increased risk undertaken by a private lender. There won’t be too many long-term loan options available, since they tend to need high ROI as a result of fewer resources available when compared to institutional lenders. As a starting point in your search for private loans, consider the following hard money lenders: Fairview Commercial Lending, The Private Bank, and Commercial Lending.
The Traditional Banking System
You’re likely already familiar with the stringent requirements that banks exude. These include non-negotiable down-payment amounts, ironclad credit score minimum requests, and documents verifying income (in particular, proof of several years in business to certify an ability to repay loans). Traditional bank requirements for loans keep rising, making it more difficult for first-time borrowers to get approved for the loans they need.
Fortis Funding provides a wide range of accessible financing solutions for businesses. Contact our offices to get the funding you need.