Help With My Loan is an alternative lender that can help your business secure commercial real estate loans and other traditional business loans. A commercial real estate loan is a loan product that covers the cost of purchasing a piece of commercial real estate, such as a warehouse, office building, or commercial building that you intend to lease to another business. In some cases, older homes are rezoned and become commercial real estate; however, this happens on the local zoning level.
It’s similar to a home loan and is referred to as a mortgage, and it’s secured by the building or land that the funds were used to purchase. When applying for a mortgage, lenders define commercial real estate as any property that produces an income. This can include buildings, such as apartments and hotels. You need to be prepared to show how the property generates income.
How Do Commercial Real Estate Loans Work?
Unlike loans for an individual buying a home that lasts for 30 years, most commercial real estate loans last as little as five years and as many as 20. However, the amortization lasts beyond the life of the mortgage. You may need to prove the potential for earning income for the property to secure funding. The lender reviews more than just your credit and debt-to-income ratio to secure a commercial real estate loan.
You need to understand that a commercial real estate loan is different from a residential mortgage. The payment schedule is considerably shorter than that of a residential loan, and you typically need to show how much income you expect to make from the commercial real estate.
However, the amount of income you expect to make should be much higher than the yearly payments on the loan:
For example, if you expect to make $100.000 in rent each year, your loan payments should not exceed around $60,000 in the same period.
The lender wants to know that the investment is a sound one, and you’ll make more than enough income to cover the mortgage payments, repairs, and periods of time when you’re looking for new renters.
Types of Commercial Real Estate Loans
There are a few main types of commercial real estate loans, including:
- Conventional commercial loan: This is similar to a mortgage for an individual, and you usually use a bank or other traditional lender.
- Commercial bridge loan: This is a short-term loan product. It’s typically used until an owner can secure better financing or makes improvements to the property and starts receiving rental income.
- Commercial hard money loans: This is an alternative loan product. These are usually funded by individuals or companies. This type of loan is usually a short-term loan with a higher than the average interest rate.
- SBA 7(a) loans: These are commercial loans guaranteed by the Small Business Administration (SBA). You get the loan through a bank or traditional lender, but it’s designed for small businesses, both new and established ones.
Requirements, Interest, and Fees
With a commercial real estate loan, you can expect to show a healthy credit score and the property’s profitability, especially if you’re looking for a more traditional loan product. Also, commercial real estate loans tend to come with more fees than for your home mortgage, including:
- Loan application
- Loan origination
- Survey fees
- and more
These fees can really add up, so you need to talk to your lender to get a fee schedule in advance.
Also, you can expect to pay a higher interest rate on a commercial real estate loan than you would on your home mortgage. Of course, you won’t be paying on it for as long, so you need to look at the interest paid over the life of the loan.
Residential Loans Vs. Commercial Real Estate Loans: Key Differences
There are several key differences between a residential home loan and a commercial real estate loan. These include:
- The loan terms are for considerably fewer years on a commercial loan, typically five to 20 years.
- The commercial loan is amortized over a more extended period of time.
- You can expect to pay a higher interest rate on a commercial real estate loan along with more fees.
- The lender looks at your loan-to-value ratio and debt-service coverage ratio with a commercial loan.
In some ways, the residential and commercial real estate loans are similar, but you need to be aware of the differences.
Where to Get a Commercial Real Estate Loan?
You can get a commercial real estate loan from banks and other traditional lenders. In some cases, investors or personal friends might loan you the money for a commercial property. However, you need to document the terms of this kind of loan carefully.
There are alternative financing options available for commercial real estate loans. These types of loans are for companies that don’t have a stellar credit rating and can’t get a traditional real estate loan. No matter which route you go, you need to carefully weigh the monthly payments against what you can afford to pay before selecting a loan product.
Help With My Loan: Assistance for Consumer, Business, and Commercial Financing
Help With My Loan is a company that can help you find financing for your commercial real estate or small business. They can also help individuals find loans.
What Do They Offer?
When you’re looking to finance commercial real estate, you can fill out a single application with Help With My Loan, and it’s reviewed by more than 300 potential lenders. You can find multiple funding offers with one submission and choose the one that best suits your needs.
What Are the Benefits of Enrolling With Them?
One of the benefits of enrolling in Help With My Loan is that it saves you time since you get multiple offers from a single application. Also, it doesn’t cost anything to submit your info. You might even receive multiple offers to help you get a more competitive rate.
How To Enroll with Help With My Loan: Start Financing your Real Estates
Enrolling with Help With My Loan is easy. After clicking on the Apply button on the landing page, you choose the type of loan you want. You need to provide your personal or business information. There is a section to add comments in case you need to explain something. You also need to indicate how you learned about the website. After filling out all the pertinent details, you simply submit the application and wait for the results. Get started with the process by filling out this simple form.