Why Choose a Non-Traditional Lender for Your Commercial Mortgage Loan?
While traditional commercial mortgage lenders (typically banks) are very useful in certain financing situations for businesses, the large majority of businesses typically:
- Cannot obtain commercial financing due to their commercial property type or loan amount
- Have often already been denied by traditional lenders
- Are simply better off using alternate means for obtaining a commercial loan
Here is a list we've compiled of some of the most important reasons why businesses should explore their options outside of traditional bank lending.
1. Many banks have a minimum loan amount requirement of $250,000 or more as well as extensive documentation requirements. Here at Principle Commercial, the loan amount requirements are determined on a case-by-case basis with the minimum typically starting at $100,000.
2. Many banks do not allow a business to use secondary financing, or mezzanine financing, which often forces a company to put a large amount of money down. With other commercial lenders, secondary financing is often available, allowing a business to borrow up to 95% total
loan-to-value (LTV).
3. Most banks require anywhere from 3 to 9 months to close a
commercial real estate loan. For most companies, this is simply unacceptable. Luckily with non traditional lenders, the average commercial mortgage loan will close in 30 to 45 days.
4. Banks typically only offer financing for "normal" purpose properties such as
office buildings and
apartment complexes. Special or
unique purpose commercial properties such as golf courses and daycare facilities are often ineligible for traditional financing. At Principle Commercial, we specialize in providing flexible financing for
unique commercial properties such as these.
5. Many banks require that businesses provide an extensive business plan in order to underwrite their commercial loan. These plans can be extremely time consuming and expensive to write. With most non-traditional lenders, creating these business plans can be avoided completely.
6. Many banks require extensive personal and business tax documentation in order to finance a commercial mortgage. Non-traditional lenders offer a wide variety of Stated-Income commercial loans, where little or no income documentation is required.
Do you have questions about a commercial loan you're looking to finance?
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