The homeowners source for private money loans.

How to obtain a commercial loan from a private money lender.

Commercial mortgages are available through banks, commercial mortgage companies, insurance companies and private lenders. Commercial mortgage rates vary as widely as residential mortgage rates, based upon property types and credit risks. While the most attractive financing can be found with these types of lenders, they usually have restrictive lending criteria. They may not want to lend on a single purpose property or a gas station. Your credit or income background can also make it difficult to obtain financing from traditional banks.

Private money commercial mortgages are also available through private lenders who have more flexible lending criteria. Also known as hard money lenders, private commercial mortgage companies focus more the current value of commercial property than on your personal financial capabilities, as the property may cover the debt service on its own. .

Most private money lenders take a common sense approach to the loan request, focusing on the property cash flow and how the loan will be paid back.

When applying for a commercial mortgage, try to be as complete as possible in the preparation of a loan package, whether you are trying to obtain financing from a bank or a private commercial mortgage lender. You should include the following:

• 2 years taxes returns for the borrowing entity and the borrower.
• 2 years financial statements on the property.
• A completed standard commercial mortgage loan application, which includes a personal and business balance sheet
• A summary of the use of proceeds of the commercial mortgage you are seeking.
• A complete description of the property.
• The current selling price of the property.
• The cost of improvements you plan to make to the property, if applicable.
• An estimate of the property’s value when with improvements are complete.
• A repayment plan for the loan, how the lender will be repaid.
• When seeking a bridge loan , provide an exit strategy for the loan; will you refinance to a permanent loan, sell or transfer the property or some other scenario?

When you are pursuing a loan with a private commercial mortgage company, you should be prepared to show what liquid assets will be available for the transaction.. Providing documentation that you are prepared to cover the closing costs and fund the difference between the commercial mortgage and the total cost of the property will make your commercial mortgage loan application move through the steps to funding much faster.
 

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