Making sense of the wide variety of commercial loan programs available on the market today can seem overwhelming. Not only are conventional programs available, but a wide range of small business programs, private placement programs, bridge loans, FHA-HUD and FNMA programs, equity loans, and more exist to muddy the waters. Determining the best programs to fit your projects is important. Often there are slight variations, from one program to the next. Fully understanding what these are could be the difference of paying a smaller down payment, securing a lower interest rate, and requiring less money at closing.
Luckily, you are able to obtain help directly from Commercial Lending Corporation (CLC) for your commercial lending needs. CLC has access to one of the largest pools of commercial money available in the nation. Further, their experienced underwriters and loan consultants know exactly what sources are currently available for any type of commercial program. Additionally, discussing your financing needs with one of CLC’s loan consultants or underwriters allows them to quickly size up your needs and recommend the programs that benefit your business the most.
Talking to Commercial Lending Corporation about your financing needs is like speaking to hundreds of lenders at once. With underwriters who have an average of 30 plus years of experience, as well as being a past net branch of a federal savings bank, CLC has been known to succeed where others have been unable to provide the necessary financing. In fact, CLC has one of the highest loan closing ratios, compared to single product lenders, and the lowest rates possible.
When looking at your available financing options with commercial loan programs, one thing you need to evaluate is whether the interest rate is fixed or adjustable. Fixed interest rate programs are often preferred, over adjustable ones, because they lock in the rate over the entire length of the loan. However, you do have to keep an eye on current market interest rates on fixed loan programs, as they do drop. In the event the rate drops, it is worthwhile to consider refinancing your current fixed rate loan with a new one through Commercial Lending Corporation.
With an adjustable rate commercial loan program, your interest rate is often fixed for a short period of time, ranging from 2 to 5 years. After this period, your interest rate can be adjusted based upon the current market rates, plus a specified percentage amount. For example, you are at the end of your fixed period, and the current market rate is 5 percent. When you first obtained your loan, the current market rate was 4 percent, and your specified percentage amount was also 4 percent, meaning your initial fixed rate was 8 percent. Now, because you are entering the adjustable rate period of your loan, your interest rate may be increased to 9 percent, based upon the current market conditions.
However, obtaining an adjustable rate loan from Commercial Lending Corporation can be beneficial in certain circumstances. For instance, if you are a higher risk due to a lack of, or poor, commercial credit and are not able to qualify for a fixed rate program, you still could quality for an adjustable rate program. Most programs contain a clause where you are able to refinance the loan after a set period of time without any penalties. This allows you time to establish or repair your credit so when you are able to refinance, you are able to secure a fixed rate program.
Some types of commercial real estate loans are not fully amortized over the life of the loan. Rather, there is a single large payment due at the end of the loan period, which is commonly referred to as a balloon payment. However, there are advantages to using this kind of loan program from Commercial Lending Corporation. For example, if you secure a 5 year fixed interest rate balloon mortgage with a 30 year amortization schedule, your monthly payments over the course of the loan period are based on the 30 year amortization schedule. If you required financing for $1 million, your monthly payments with a 5 percent fixed interest rate balloon loan would be approximately around $5,400, compared to around $18,900 for a conventional 5 year loan with a 5 percent fixed interest rate.
Because you are able to obtain lower monthly payments with a balloon loan program for a shorter period of time, it allows you to make financing investments into a variety of commercial property projects. For instance, if you are purchasing an older office building and plan to rehabilitate and modernize the facility, you may have plans to sell the property once the project is finalized. In this situation, a balloon program from Commercial Lending Corporation would be an ideal form of financing, as it gives you the time you need to complete your project and sell the property. In the event you are unable to find a suitable buyer and are approaching the end of your loan period, you are always able to roll your final balloon payment into a new loan.
When you are looking for a short term solution for obtaining financing on commercial real estate, you could consider a bridge loan through Commercial Lending Corporation. A bridge loan is a special type of program used for a variety of reasons. Because it is a short term solution, the kinds of documentation normally required for conventional programs are not always required. Further, this program is able to be used to close quickly on the property. For example, you might have found an attractive sale price on a building in your area and want to purchase it before another interested party buys it out from under you.
Another reason you could require a bridge loan from Commercial Lending Corporation is in times when you are restructuring your debt and want to avoid foreclosure. Since refinancing through a conventional program can take time, using a bridge loan helps get you the funds you need, now, to catch up your past due payments. It is important to remember you are responsible for making monthly payments with a bridge loan, just like other types of loan programs.
Bridge loans are only short term solutions designed to provide you with quick results. After obtaining a bridge loan, you have a set period of time to find a long term solution. The amount of time you have to secure conventional long term financing depends upon how your bridge loan was underwritten. Typically, this period can range from as little as a few weeks, up to three years.
In order to start the process for a private placement program (PPP) through Commercial Lending Corporation, there is a fee. This fee is used to underwrite and prepare the SEC Private Placement Memorandum, get it approved, and then use it to present to their accredited lenders and investors. Using a PPP requires a little more time, before it can be closed, and ranges between 45 and 90 days. This is because multiple investors have to be contacted and presented with your Regulation D Offering. If they like the deal, they issue a check or provide funds for the amount they want to invest in your loan.
Further, you need to be aware that certain items are not included in the fee to start the process for obtaining a PPP from Commercial Lending Corporation. These items could include site inspections, appraisals, pre-payment penalties, environmental studies, insurance reviews, and other legal reviews. Putting together a PPP is a complex process which involves being able to be able to have money available to cover your expenses and fees. As a result, you seriously need to evaluate and determine whether this program is ideal for your financial needs.
In the event a PPP is not the type of loan program you want to pursue, that is not an issue, as CLC has access to a wide range of conventional and traditional commercial programs. It is always a good idea to discuss your project or lending needs directly with one of CLC’s experienced underwriters, and take advantage of their knowledge, to determine what programs are ideal.
Sometimes there can be restrictions placed on certain commercial real estate loan programs available through Commercial Lending Corporation, as well as single product lenders, based upon several different factors. These factors are in place to not only guarantee you do not borrow beyond your needs, but also to protect the underwriter in the event of a default on the loan. The most common factor used is the loan to value ratio (LTV). This ratio is a percentage of the maximum amount you are able to borrow against a property’s appraised value. In some cases, the LTV might be calculated using the future appraised value, such as found with new construction or a rehabilitation program.
In addition to the LTV, lenders — like Commercial Lending Corporation — also consider whether they are underwriting a recourse or non-recourse loan. A recourse loan frequently has a higher LTV, because the lender has the right to not only foreclose on the property used as collateral, but also to take legal measures to collect any remaining balance still owed from the company’s other assets. A non-recourse loan limits the lender to only being able to foreclose on the collateral, but often has a lower LTV to ensure their interests in the property are protected, should you default.
Any amount still required about the LTV is your responsibility to supply. For instance, if you are purchasing property and are able to secure a loan with a 75 percent LTV, you would have to cover any remaining balance as your down payment amount. It should be noted that this amount could be less than 25 percent, in cases where you are able to secure a purchase price less than the appraised value.
Starting your own small business is a dream many people have, at some point. However, not everyone has success in becoming their own boss. The reason some people are successful and get their business launched, while others are not, is because they took the time to explore their commercial financing options through Commercial Lending Corporation (CLC). This nationwide wholesale lender has access to one of the largest pools of money available in the country for underwriting commercial loans. Additionally, they have a wide network of financial partners to tap into for different programs to fit with your business needs. As a result, CLC is able to provide some of the highest loan closing ratios, with some of the lowest rates, over a single product lender.
Commercial Lending Corporation has the experience to help you find the financing you need for your business. CLC provides a comprehensive range of products and services for the commercial real estate market. Presenting your financial requirements with CLC is similar to speaking with hundreds of lenders, all at the same time. Instead of having to complete multiple loan applications, CLC is able to help you prepare and complete a single application. Once that is submitted, along with any required documentation, you loan underwriter presents it to as many interested lenders in their network as possible. Because your loan application is being reviewed by multiple lenders, you often end up with several offers. You loan underwriter will help you review the terms of conditions of each one, and then help you select the best program.