Industrial building loans and warehouse property loans do require a considerable chunk of investment, and getting a suitable loan passed can be quite a challenge. However, fact remains that once a business owns an industrial building or warehouse, the growth of the business in question can be exponential. After all, not just would this add to the equity that is gained, but it would also place a business in better light when it comes to borrowing in the future. Besides, a line of credit that is linked to commercial real estate would also take into account factors such as expansions, cash flow, impeding purchases, etc.??
Will you Qualify?
Since qualifying for an industrial building loan or warehouse property loan can be difficult, it is important that you do your homework before you expect to get the desired funding. Do realize that lenders look for certain prerequisites when it comes to passing these kinds of loans. For instance, a number of lenders would only consider businesses that have been operational for over two years, and there are lenders that push this to five years.??
Lenders would also look into the debt-to-equity ratio, and this is something that should ideally be on the lower side. Also bear in mind that lenders look at different types of businesses with different mindsets, and even though the industry that you deal with might be known to produce steady profits, it could be one that the lending industry does not view with favor.??
Options for the Borrower:
In looking for industrial building loans and warehouse property loans, a borrower does have different options to choose from, and these would cover aspects like the loan amount, the terms & conditions, the borrower?s requirements, etc. Repayment periods in most scenarios would vary in between six months and thirty years.??
The required loan amount would decide whether the business should apply for a small balance loan or a large balance loan. Small balance loans typically cover loan applications for amounts in between $400,000 and $1M, and requirements for loans over that amount would come under large balance loans. Large balance loans can stretch up to $4M, and in case a borrower is looking at acquiring an SBA loan, then even a small balance loan could stretch up to $4M.??
As a borrower, you should know that both small and large balance loans come with the options of fixed and variable rates of interest.? While the fixed rate option ensures that the interest rate remains the same for the entre tenure of the loan, the variable interest rate option would see fluctuations depending on the prevailing market conditions.???
The Down-Payment:
Down-payments for industrial building loans and warehouse property loans would generally be around 25% of the required amount for owner user properties assuming your business service the debt and it?s around 35% to 40% for investment properties, and this would remain the same for both small and large balance industrial building and warehouse property loans. In case you are looking at an SBA loan, then you can expect the down-payment to be as low as 10%.??
Stated Income Loans:
If you are looking at options that do not require income documentation, then you should look at hard money or private money loans. Stated income loans doesn?t exist for commercial properties as all lenders are looking for income producing properties.? Hard money loans can be obtained with minimum 40% down payment? and as for refinance, the max loan to value would be 60% at most.???
City Capital Finance specializes in arranging commercial and apartment buildings loans and offers assistance to borrowers looking for industrial building loans and warehouse property loans, and apart from conventional lending options, it also offers various private financing alternatives.
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