5 Areas that Qualify a Commercial Real Estate Hard Money Loan

1
5 AREAS THAT QUALIFY A COMMERCIAL
REAL ESTATE HARD MONEY LOAN
2625 EAST 14 ST. SUITE 209 BROOKLYN, NY, UNITED
STATES 11235 INFO_at_ EXPRESSCAPITALFINANCING. COM
www. expresscapitalfinancing. co
2
Although you may be familiar with residential
real estate lending, securing a commercial real
estate hard money loan involves excellence in
key financial areas. Before you start the
commercial loan process, take some time to review
the five areas that can make a difference
between successful qualification and unfortunate
rejection.
3
1. Total Net Worth
You may have heard that it takes money to make
money, and in the world of commercial real
estate this often the case. When reviewing
qualifications for a commercial loan the lender
places a heavier emphasis on a net worth that
what you see with residential loans. In general,
a net worth that is equal to the requested loan
amount is recommended.
2. Liquid Assets
Even with a high net worth, if your real estate
down payment wipes out your easily accessible
cash flow a lender may consider that a
liability. Lenders want to know that after the
loan closes you will still have quick access to
cash in case of an emergency to ensure you dont
miss a payment.
4
3. Previous Experience
Although residential lenders look at employment
history for stability purposes, commercial hard
money lenders take it one step further and look
for prior management experience or previous
experience as an owner. A proven track record as
a landlord or previous commercial property owner
can increase lender confidence in your ability
to handle the rigors of commercial ownership.
4. Income Stream
Many commercial property owners are
self-employed, so commercial real estate hard
money lenders need to see the big picture of an
income stream to provide funding. Commercial
lenders are less concerned with debt-to-income
ratio than residential lenders. Potential owners
that are not self-employed should be prepared to
provide W-2 forms for several years and other
documentation to show any other income streams
5
5. Credit History
When it comes to lending, most people think that
a good credit score carries the most weight.
This may be true with residential lending, but
commercial lenders are less concerned with the
potential property owners personal credit score
and more concerned with other areas of
qualification like net worth, liquidity, income,
and previous ownership experience. In some ways,
the commercial real estate lending process works
similarly to obtaining a residential real estate
hard money loan. There are key differences that
potential commercial property owners need to
become familiar with before beginning the loan
process to make sure that their overall
financial picture shows readiness to take on the
project.
6
Thank
You!
2625 EAST 14 ST. SUITE 209 BROOKLYN, NY, UNITED
STATES 11235 INFO_at_ EXPRESSCAPITALFINANCING. COM
www. expresscapitalfinancing. co