Before investing in commercial real estate, there are many things you need to put in order. To begin with, decide on the commercial property you wish to invest in. In addition, you need a sustainable financing option to utilize in your projects. Financing your project is among the challenges you must overcome. Securing a CRE loan is one of the best avenues to utilize. But do you qualify for this loan?
Types of Commercial Real Estate Loans
Bank Term Loans
Qualifying for a bank term loan dictates you start by establishing productive relationships with the lender. This type of loan comes with a strict application process.
If you have tried getting a CRE loan from a traditional bank without success, the chances of getting approval are higher when you consider an SBA loan.
Line of Credit
If you want to borrow a commercial real estate loan against your equity, a line of credit becomes the best option. This is especially if you already own a property and you want to borrow.
Things You Need to Qualify For a Commercial Real Estate Loan
Note that before approving your CRE loan, lenders will want to know what you have as security for the funds. This means providing equity against the loan you borrow. You should have security such as property insurance before applying. Unlike other types of loans, lenders will assess the value of the security or equity against the funds you need.
Check Your Credit History
To a larger extent, your credit history determines if the lender will approve your loan application or not. You should expect the lender to check personal and business credit scores and history. As much as the credit score requirements vary with the lenders, it is vital to access your history to understand if you qualify for the loans.
Assess Your Source of Income
Your ability to repay the CRE loan depends on your source of income. Note that the lender will carefully assess your source of income before processing your application. You should also assess your expenditures against your income. This means providing tax returns and other financial information during the loan application process.
Having proper funding increases the success rate of your commercial real estate project. Utilizing a CRE loan, therefore, becomes the best financing option. Call or visit Aspen Capital Solutions for professional insight.