05 Dec 2021

Commercial and Industrial Properties Loans: The Basics

The purchase of commercial and industrial properties requires a large infusion of capital. It’s possible to obtain loans that cover the costs; it’s also important to understand the requirements.

Any time an applicant provides a qualified guarantor, the applicant’s purchasing power increases. In many cases, it’s possible to obtain 100% financing. Since the guarantor provides collateral for the loan, the lender has a fallback to cover potential losses.

Without a guarantor, the lender takes a look at the property’s value. If the property has a value under $1 million, many lenders finance up to 80% of the property’s value. If the property has a value under $2 million, the lender can offer up to 75% in financing.

When the value of the property goes over $5 million, it’s best to discuss the details directly with the lender. Some lenders will finance commercial properties with a value of $50 million. But the lender needs assurance that all the ducks are in a row.

If the property’s value remains under $5 million, the applicant can obtain up to 70% of the property’s value in financing. The higher the value, the higher the risk, especially if the property remains vacant.

As a non-bank lender, Mortgage House understands that commercial properties provide good investment opportunities. Our team is available to help you meet your financial goals. We also offer refinance home loan opportunities.

Commercial and Industrial Properties Conclusion

Financing for commercial and industrial properties purchases differs from home loans used to purchase residential homes. Mortgage House loan specialists can cover the details with you. Give us a call today.

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