When buying commercial property, you will also need to have a good understanding of the loans that are available to you. This will allow you to navigate your purchases with more accuracy and speed, eliminating potential dead ends before they can hinder you.
If you intend to occupy a portion of the property with your business, then the type of loan you will need to apply to will vary.
Applying for your property loan
ValuePenguin discusses the type of property loan you may want to look into. First, you have investment and commercial loans as options. You should apply for a commercial property loan if you intend to have your business take up a majority (or all) of the space you intend to purchase. If you plan to rent the majority of this property, then you should instead apply for an investment loan. This reflects the nature of your ownership interest.
The assessment of your application
A commercial lender will then assess facts related to your application. They evaluate the property, its general condition, and how its value ties to the overall application of your loan. Any potential lender may also evaluate the personal finances of any business partners or other owners that you work with.
The review of financials for a business includes not only the general cash flow but also your ability to repay annual loan costs. You must be able to do this relative to your annual net operating income. If you find any part of this process confusing, you should also consider seeking legal counsel from business experts. They can help guide you through and make the best choices.
