Commercial Funding
Commercial and investment financing
Start with the property
and its cash flow.
Commercial financing depends on the property, its income, the borrower’s financial strength and the purpose of the transaction.
What lenders look at
What affects the financing.
Commercial qualification depends on both the economics of the property and the financial strength behind the deal.
Property cash flow
The income the property generates and its ability to carry the debt.
Property
Type, condition, location and intended use.
Financial strength
Business and personal credit history, net worth and other factors.
Transaction
Purchase or refinance, amount and overall objective.
Rental DSCR calculator
Does the rent cover the payment?
For rental properties, many lenders qualify the loan on the property’s rent rather than your personal income. This is the ratio they check.
Before you begin
Know what you’re trying to accomplish.
A few decisions define what the financing needs to support.
- The property: what you’re acquiring or refinancing, and its condition
- The use: owner-occupied, operated by you, or held as an investment
- The income: current and expected cash flow against the debt
- The hold: how long you expect to own it
- The plan: how it fits your goals, and your exit strategy
In depth
How commercial loans differ from home loans.
A residential loan is judged mainly on debt-to-income: your income against your debts. A commercial loan is judged mainly on the debt service coverage ratio: the property’s net income against its loan payments. That means you’ll want to know the property’s projected return before you buy or refinance.
The property’s cash flow helps determine both its value and its future return. The loan type and amount also depend on your business and personal credit history, your net worth, the type and condition of the property, its location and the outlook for the local market.
Start with how you’ll use the property. Will you occupy it or hold it as an investment? How will it improve your cash flow? How long will you keep it, and what is your exit strategy? Then look at its current and future cash flow. Call us when you have the answers, or when you need help finding them.
General information only. Commercial financing requirements, terms and eligibility vary by borrower, property, transaction, loan program and lender.
Start with the transaction details.
Tell us about the property, its use and the financing you’re considering. Or call 305-933-1626 to talk it through.