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.

Start a Commercial Review

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.

Monthly rent ($)Lease or market rent Loan amount ($) Interest rate (%) Loan term (years) Property tax ($ per year) Insurance ($ per year) HOA or condo fee ($ per month)

Debt service coverage ratio

–

Principal and interest: –
Full payment (PITIA): –
Rent minus payment: –

DSCR is monthly rent divided by the full monthly payment. Above 1.00 means the rent covers the payment; rental programs commonly look for about 1.00 to 1.25. Estimates for planning only, not a loan offer. Your actual rate, payment and costs depend on the lender, program, property and your full application.

Get Pre-Qualified

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.