All California Lending is able to help with institutional commercial loans as well as hard money commercial loans. Institutional financing for commercial properties is more stringent with regards to guidelines, but if you can qualify these loans will carry much lower interest rates than their hard money alternatives.
To qualify for a bank loan of this type the guarantor must have good to excellent credit. Credit does matter in this instance, and the credit requirements are tighter than they have been in the past.
In addition to credit requirements, the property must have an acceptable debt coverage ratio, or DCR. Typically speaking this debt coverage ratio needs to be at least 1.20, and often times 1.25. There are some instances where the DCR can be lower, but not generally speaking.
Seasoning is another aspect of institutional commercial lending that is important. The seasoning we are looking at is the income on the property. Typically speaking you need to be able to show tax returns with the income declared for the subject property. Practically speaking this means you need seasoning of one to two years on the income for your commercial property.
If you meet these criteria – good to excellent credit, a DCR of 1.20 or better and income seasoning on the property – we may be able to secure an institutional commercial loan at a very advantageous rate. Call us today to discuss your commercial loan scenario. We work with a number of banks and institutions and have access to many niche commercial loan products.
Whether you are looking for a small balance commercial loan, apartment building loan, mixed use loan or any other commercial loan, give us a call to see how we can help you.