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.

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