A Commercial Real Estate loan can help you secure your next property for your business or a tenancy. There are a lot of different types of loans, and the best option may come down to your credit history or cash on hand.

The Types of Commercial Real Estate Loans (CRE loans) Are:

Small Business Administration (SBA) Loan
Certified Development Company (CDC) Loan
Conventional Loan
Commercial Bridge Loan
Hard Money Loan
Conduit Loan

SBA and CDC loans are backed by the government and maybe easier for businesses to be eligible for than other types of funding options. Conventional loans typically require excellent credit and some sort of down payment. A Commercial Bridge Loan is usually a short-term loan, while a Hard Money Loan may be best suited to those with poor credit ratings. As for a Conduit Loan, expect flexible terms and fixed rates.

How to Qualify

If you are seeking a commercial real estate loan, know that this is very different than a conventional mortgage loan. Lenders have different criteria for approving your CRE. Here is what you need to do:

Increase your credit score. While not the most important aspect of your CRE application, a strong credit score is a must for approval. Plan on improving your score- particularly if it is under 600 currently.

Consider your net worth. Most lenders will want to see your net worth- and it should be about twice the amount of the loan that you are requesting. Figure out your net worth by deducting your liabilities from assets.

Create more liquidity. Make sure that you have enough liquidity and cash on hand to cover the down payment, as well as any unexpected business expenses that could arise.

Document your expertise. Some lenders may want to see your portfolio to determine how much experience and expertise you have in the industry. Be prepared to document your years in the business.

Provide proof of your income. For this, you will need your cash flow statements.

Want to learn more about commercial real estate loans and funding options for your business? Talk to the industry professionals and experts at Sterling Capital Solutions today!