Commercial mortgages are loans taken to purchase a property that will be used for a business or commercial purpose. Properties that will be used as shopping centers, industrial centers, offices, golf courses, resorts, hotels, parking garages, car washes, and other such purposes are termed commercial properties. In California, the best way to apply for a mortgage for a commercial property is to directly contact a commercial mortgage lender.
There are essentially four sources of capital from commercial mortgage lenders. Basically all commercial mortgages come from theses sources, which are commercial private money lenders, conduit or CMBS lenders, SBA lenders and portfolio bank/lenders. Though these distinctions can be somewhat blurred, for example some national banks pool and sell their loans like CMBS lenders, these four categories are what make up the commercial mortgage market. Let\?s take a brief look at each individually.
Many of the most successful and powerful commercial mortgage lenders, as-well-as top commercial mortgage brokers avoid originating small balance loans. It is not easy to find a firm willing to underwrite a commercial mortgage with a loan amount of less than $1,000,000.00. As a borrower in need of a smaller loan, you may feel somewhat insulted by this circumstance, but if you take a moment to see things from the lenders point-of-view you will learn the key to getting your small balance loan through to closing.
In an already challenging business environment, the prospect of getting a new commercial mortgage can at times seem dim. The lack of available funding can hamper the business dreams of many enterprising men and women who have sound business plans. Fortunately, lenders have not disappeared from the scene entirely. They are, however, strongly insistent on ironclad evidence of future success. If certain hurdles can be overcome, it is possible to get a good commercial mortgage loan even in these lean years.
In a commercial mortgage, the liability for defaulting on your payments is restricted to the property pledged as collateral. As a result, money lenders have very stringent conditions before they will consider sanctioning a new loan. Usually this decision is made under the watchful eye of seasoned professional with a strong track record in successfully navigating the aggressive and dangerous capital markets.
Different Commercial Mortgage lenders also have different stipulations regarding how much documentation you\?ll need to provide?both before and after the loan is closed. You may have to pull docs out of your nose; you may be bound to give quarterly reports after the loan is closed, with penalties including possible default if you fail to do this. Make sure you know all about these stipulations before you sign on any bottom lines. If one lender isn\?t to your liking, talk to another (once again, using a broker can really streamline this process for you if extra cost is no obstacle to you).
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