Commercial Property Finance – What You Need To Know


Commercial property finance has numerous variants, sometimes making it complex & difficult to understand. There are innumerable platforms out there, each suiting different projects – and the usual issue is finding out which product best suits your business needs. Here is our guide to the more common commercial property finance products available on the market.

Commercial mortgages:

Commercial mortgages are available to a variety of businesses, from sole proprietors to LimitedLiability Companies. Lenders will usually fund up to 75-85%  of purchase costs with terms of up to thirty years fixed or 3,5,7 or 10 year fixed period ARMs. Typically they will secure the mortgage against a first lien& affordability is based on the profitability of your business, and its ability to make the monthly payments. Alternatively you can do stted income and asset loans where you “tell” what you make and tax returns are not needed.

Portfolio finance:

A long-term business loan that is offered to property investors who’ve a number of rental properties. The lender offers the ability to consolidate borrowing into one loan. Serviceability of this loan is based on rental earning.

Property development finance:

Property development finance is generally in the form of a short-term loan that is used for the development of a new building project, or restoration of an existing property. Lenders will look to advance up to 70- 85 percent of the gross development value, and terms can be up to 24 months.

Bridging finance:

Bridging finance is a short-term finance solution often favored by property developers & investors, which offers a quick way to finance the purchase of a property. The lender will take a first lien on your property, and will seek an exit once the loan has come to term.

Mezzanine Finance:

A little more complicated, this is a hybrid type of finance that combines elements of debt financing & equity investment – and is secured against the property. Mezzanine finance usually helps property developers decrease their cash flow requirement, allowing them to finance projects which would usually require a larger capital share.

Auction Finance:

Auction finance is designed for seasoned property developers & landlords. It’s a way of arranging funding in advance of an auction, so you know the property value & type you can finance before you walk into the auction room.
For more information or if you have any questions on Commercial Land Financing in Texas feel free to contact Commercial Loans Of Texas at 888-727-3057.

Comments

Post a Comment

Popular posts from this blog

Things to Know About Commercial Mortgage Loans In Texas

Image
If you have been running your business for some time & you are keen in buying or updating a commercial real-estate property, you might be in the market for commercial mortgage loans in Texas. Commercial mortgage loans are identical to conventional mortgage loans; but rather than borrowing money to purchase domestic property, you secure any land or property for commercial purposes. Instances of commercial property are industrial warehouses, office buildings, shopping centers, apartments, commercial building or land zones for commercial use. Also you can use commercial mortgage loans in Texas to develop existing or new commercial property. If you’ve existing commercial property, you also can utilize the funds from the loan to extend your current premises.  While some businesses are effective at running their business from home, the mainstream of businesses requires a storefront or an workplace to greet customers; and relying upon your industry, you may require a warehouse t
Read more

What’s Cash-Out Refinance and How It Works

Image
Texas Commercial Loan Financing A cash-out refinance is a type of mortgage refinancing that enables you to cash out your home equity. Your prior mortgage balance is exceeded by the amount of the new mortgage, and the excess is paid to you in cash. Refinancing is a common practice used to replace an existing mortgage with a new one in the real estate industry. The new mortgage often offers the borrower more favorable conditions. By refinancing a mortgage, you may be able to reduce your monthly mortgage payments, negotiate a lower interest rate, renegotiate the periodic loan conditions, remove or add borrowers from the loan obligation, and, in the case of a cash-out refinance, access cash from the equity in your house. Example of a Cash-Out Refinance: Consider a scenario in which you borrowed $200,000 to purchase a $300,000 piece of property, but you are still in debt by $100,000. You have also accrued home equity of at least $200,000, assuming that the property value has not fallen b
Read more

How To Maximize The Potential Of Your Commercial Real-Estate Loan

Image
A commercial real-estate loan no doubt can create new possibilities for your business, but just qualifying for a Houston Dallas commercial loan and spending the additional capital doesn’t guarantee a considerable return for your organization. A good amount of thought & planning should go into the process if you want to acquire the full return on your investment. When you put proper planning into your project, your company is bound to see invaluable benefits. Create a thorough investment strategy by employing the below mentioned guidelines and make sure your organization’s capital is well spent for the rest of the year. Take decisions while keeping future in mind: Don’t forget that trends in commercial real-estate can be disreputably short lived. After all, great ideas look less imposing once the whole industry has caught on. Your objective is to foresee trends, not only to ride the wave. That entails your organization need to make it a top priority to evaluate the tr
Read more