investment property mortgages

A Borrower’s Guide to Commercial Mortgage Loans

Commercial mortgage loans are quite different from traditional mortgage loans. A traditional mortgage loan involves you borrowing money to purchase a residential property. With a commercial mortgage, you can secure the property for commercial purposes directly. You may also use commercial mortgage loans to develop an existing or new commercial property.

If you already own a commercial property, you can use the funding from a commercial mortgage for business expansion.

With this guide, we will provide you with some vital information about obtaining a commercial mortgage loan.

Do You Need a Commercial Mortgage Loan?

The majority of businesses need an office or a storefront to attract customers. Depending on what kind of business you own, you may need a warehouse to stock all your inventory.

Beyond owning a property to operate from or to store your merchandise in, having your commercial property secures the future of your business. It makes you more financially stable as real estate prices generally appreciate over time.

If you are ready to purchase a property for your business, then yes, you need a commercial mortgage loan. However, you will be required to meet specific criteria before applying for the loan.

What are the Requirements of Acquiring Commercial Mortgage Loan?

All commercial mortgage loans are not the same; that’s why their criteria and requirements are different. Factors like your experience in the industry, minimum credit score, loanable amount, and conditions will differ from lender to lender.

Here are the financial documents that may be required to acquire a commercial mortgage loan:

  • Bank statements – for savings and checking accounts (business and personal)
  • Financial history and profiles of all business partners and directors
  • Up-to-date business and personal tax returns depending on the program type
  • Business-financial records
  • Asset and liability statements

How to Acquire a Commercial Mortgage Loan?

Lenders determine some pre-qualifying factors even before you fill out an application form for a loan. The pre-qualification procedure includes assessing your income, financial history, and debts. Once you have passed the pre-qualification process, you move forward to the next stage of the application process.

Traditional commercial loan lenders often ask for your income tax returns, financial statements, and banking statements from the previous 2-5 years to assess your financial credibility and business stability.

Commercial mortgage loans usually involve dealing with banks, substantial sums of money, and lenders, so it is more likely that a loan process can take a few months for all the documentation to be evaluated and verified.

To make matters simple, ExpressLends offers ‘No Income Verification Investments,’ which brings convenience for loan seekers. Unlike other financial lenders, which involve several types of financial paperwork, ExpressLends assesses your available collateral and income and ensures minimum documentation requirements. Once all the paperwork is approved, your loan application will be forwarded to a loan sponsor who might either approve or reject your application based on the provided information.

Do You Need a Commercial Mortgage Loan?

To sum up, commercial mortgage loans are needed to invest or develop an existing or new commercial property. The property can be utilized in several ways to generate passive income over time.

The process of acquiring a commercial mortgage loan involves obligatory requirements that you need to fulfill. A solid financial background helps speed up this process.

Do check out ExpressLends’ ‘No Income Verification Investment’ program which requires minimum documentation to secure your loan.