The first thing you’ll want to know when it comes to commercial refinancing is what exactly is a commercial loan. Commercial loans are generally short term loans that are used to purchase larger properties like multi-unit properties. They have a higher limit than a home loan because they usually costs quite a bit more to purchase and they often need to be secured pretty quickly as well.
Commercial loans without a sizable down payment are rare and can only be funded privately so we’d love to discuss your ideas and any potential projects you might have in mind. If you are new to this type of loan, you’ll want to make sure you meet all the qualifications before starting out on your project, so be sure to set up an appointment with us so we can answer any questions you may have.
How To Qualify?
When it comes to qualifying for a commercial loan, your financial history and credit worthiness is just as important as it would be with a traditional loan. It’s important that when you apply for a commercial you have your financial documents in order to make the process that much smoother. The documents should so that the business is in good financial standing and that it can repay the loan in a timely manner. This will prove to the lender that they are making a sound investment and that the loan will be repaid.
What About Refinancing?
Generally when you are discussing refinancing with a lender they want to know why you plan to refinance, and that is the same when it comes to commercial properties. One reason people choose to refinance a commercial property is to get a lower interest rate or lower monthly payments. Getting some cash out from a commercial property can be used to improve that property and increase the value as well. Your credit score is also going to be considered as it would with any other purchase of property but the property and its value is also going to play a part in whether or not you will be approved.
You will also want to discuss specific programs and refinancing options with your lender since the way the funds will be used can determine the terms of the refinance. If you are using the funds to buy property or expand, you may qualify for a cash out/build out refinance. The overall income your building is going to play a big factor in the cash out as well since it will help determine if you are seen as a good candidate to pay the funds back over the time allotted. For example, if your building is generating more funds on a monthly basis than the monthly payment, you will be more easily qualified than someone who is just barely able to cover the payments.
Contact Us Today
As a business owner or someone that owns commercial property, you have a lot to handle including the financial decisions. If you plan on turning that property into some cash, we would be more than happy to help out by answering questions about the process of refinancing so feel free to reach out to KC Investor Funding in Kansas and Missouri today!