Be Prepared When Exploring Commercial Mortgage Loans
 

Often times borrowers face difficulty acquiring commercial mortgage loans simply due to the fact that they are unprepared. Commercial mortgage loans are difficult to get approved because they require a significant amount of documentation and a long time to process the file. But, if you're a business owner seeking capital to fulfill your business needs then it's imperative to take advantage of this type of loan as commercial mortgage loans are a very valuable asset to business owners who already own, or want to own commercial property.

First off, in order to make sure that the payments can be repaid as agreed, a borrower should know their payment threshold for commercial mortgage loans prior to beginning to seek out financing. Like most loans, commercial mortgage loans can usually, be repaid in flexible, monthly installments both short-term and long-term. However, if identifying suitable commercial mortgage loans to meet your needs becomes an arduous ordeal for you then you need to seek help from a loan specialist such as an experienced commercial mortgage broker. A competent mortgage broker has a wide array of knowledge and expertise regarding different property types and different financing options available for various commercial property types.

It should be noted that commercial mortgage loans can be used to acquire property that will provide ongoing monthly income by various means. This could include rental income from multiple tenant properties such as a retail strip center or multi-family housing complex. Other properties can generate other retail sales income such as a convenience store and fuel station combination.  An experienced mortgage broker should be able to guide you in the right direction and prepare several options for commercial mortgage loans available for a specific property type that best fits your business goals and income objectives.

Commercial mortgage loans serve multiple purposes in that one can use commercial mortgage loans for the purpose of not only acquiring a property for business use but also commercial mortgage loans can be used to access accumulated equity in their property and use this equity for business purposes as well.

This type of loan would be considered a cash out refinance loan to unlock your equity for business expansion purposes. It can also include using the proceeds from commercial mortgage loans for renovation of your existing property or possibly to add an addition for anticipated business expansion. It is also possible to request financing for other business needs such as business equipment in a manufacturing facility. Another example would be to update furniture, fixtures and equipment (FF & E) such as would be needed from time to time a hotel or motel property environment. You should keep in mind that there are usually some restrictions on how you can use the money so you will need to use that money accordingly. Having said that, it would be in your best interest to seek advice of your independent commercial mortgage broker to help guide you through the lending intricacies and what you can or cannot do with the money that you will borrow. In fact, they are the most reliable source who can ease your burden and help you get hold of the different types of commercial mortgage loans required for your particular situation.

The different types of acceptable collateral used for these commercial mortgage loans in today's market includes professional offices, retail shops, industrial units, hotels, medical facilities and senior care homes.  All of these property types are suitable property assets for commercial mortgage loans because most of them are income producing properties that generally can carry themselves and service the loan payment solely from the income that they generate. However, due to the ongoing financial crisis, many mortgage companies are imposing stricter guidelines on their loans. If you have kept good business records and are able to verify your financial data then it should not be difficult to secure a loan to meet your business needs. In fact, it may be possible for you to refinance your current commercial mortgage loans and reduce your costs by lowering your interest rate and extending the loan term and possibly even receiving a business tax deduction. (contact your tax professional for more advice)

An important fact to keep in mind during this ongoing credit crisis is that some commercial mortgage lenders will require you to have been in business for a minimum of five years in order to get a better feel for your business income and expense fluctuations and be sure that you can make your payments on time. Besides this, they may also require that you commit to financial reporting on a regular basis.  So long as you comply with with the terms of the mortgage, you should not have a negative experience resulting from your commercial mortgage loans.

Contact Ray Wateska at Westshore Mortgage & Investments Co., Inc. for questions related to commercial mortgage loans.