A commercial mortgage is a loan that is secured by commercial real estate, such as an office, building, warehouse, mall, apartment complex, and so on. In return for pledging collateral, business owners get a lower interest rate (and therefore lower total cost of borrowing) vs. an unsecured business loan. They also typically qualify for a larger loan with a longer term, since commercial real estate is a fixed asset that usually does not depreciate in value over time.
If you are in the market for a commercial mortgage loan, then educating yourself with accurate facts — and steering clear of misinformation and myths — is not just important: it is critical! To that end, here are 3 things that you need to know before applying, not after:
Not all commercial mortgage loans are the same.
“Commercial mortgage loan” is a catch-all term that (as noted above) refers to funding that secured by commercial real estate. However, the exact terms and conditions for this type of funding varies from lender to lender. Make sure that you get all of the details, and ask as many questions as you deem necessary — especially in regards to processing time. Remember: the only bad questions are the ones that you do not ask!
Your credit score might matter a lot — or hardly at all.
Some lenders — such as banks — insist on excellent personal and business credit scores. However, other lenders look at multiple sources of information to assess a borrower’s reliability. For instance, here at National Business Capital our financing underwriting criteria is not based on FICO, which is a key reason why our approval rates are substantially higher than banks.
You don’t just need an affordable commercial mortgage loan: you need a relationship.
When calculating your financing options, it is easy to get focused on the numbers — and obviously this is important. But it is not the full story, because once your loan is approved and the cash is in your account, you will invariably need to continue working with your lender to make adjustments going forward. As such, ensure that you do not get lost in the numbers and lose sight of the importance of choosing a lender who is credible, experienced, reputable, transparent, consistent, responsive and trustworthy. In other words: you lender must care about your long-term success as much as you do!
To learn more about leveraging your business real estate to obtain a commercial mortgage loan, contact the National Business Capital team today or fill out our two-minute application to get your funding decision in 24 hours.
A commercial mortgage loan is a great way to expand your business and reach new areas! If you’re looking for more opportunities that business lending can help you capitalize on, download our FREE eBook today: