The Do's and Don't of Borrowing /
How To Apply For a Commercial Real Estate Loan
Provide complete and accurate information. Include tax returns, operating statements and rent rolls, both current and historic.
If you are asked to complete a commercial loan form, be sure to fill every applicable blank space.
Provide a concise but complete "story" or business plan in the form of a "Commercial Loan Request." Big packages go to the bottom.
Don't hide any problems. Tell us where "the hair" is.
Give strengths vs. weaknesses, and include any mitigating factors.
Provide pro-formas and budgets.
Provide biographical information including activities with similar commercial properties, if possible. Similar, successful experience is a big plus.
Address capitalization, sponsorship and liquidity. Where is the money coming from to make the down payment, what reserves will be provided, what are sources of cash flow if there is a chance the property will not cover the debt service adequately? Are outside lines of credit available?
Tell us about the market for your commercial property.
The bottom line: We are a small and agile loan committee. We are quick, responsive and can offer competitive rates. If your bank or other institution is not getting the job done, give us a chance. In a nutshell, what we want to know is where is the money coming from to make the monthly payments and how will the commercial loan eventually be repaid.
We hope this helps and look forward to working with you to add value to your commercial real estate transaction.
-- The Santa Barbara Commercial Mortgage, Inc. Team