Commercial Development Loans
Developing a new property for your business or company can be expensive and most of the time, a loan will be required for it. However, before you jump to it, you must understand commercial loans to acquire properties aren’t the same as commercial development loans.
The process of acquiring an existing property compared to developing one, especially a commercial unit that is usually bigger than residential ones, comes with more expenses and terms. Overall, banks and similar institutions where you can apply for loans aren’t open to working with companies or individuals that need a loan for development.
Instead, they are constantly aiming for fixed ones that are all about acquiring or renovating the property either because the borrower is an owner-occupant or a real estate investor. The reason behind this is because commercial development loans are more irregular and harder to consider when the borrower usually doesn’t have a good record or history for it.
Also, it takes more time and effort to determine if a business should have its loan application approved or not. Now, this tends to change if you look for lenders that are more interested in helping and having clients than going through difficult processes or not. Most real estate investors that are aiming for this part of the industry—as weird as they are—, prefer to go for private lending companies that can offer better terms and, to begin with, this type of loan.
If you are, on the other hand, an owner and just need the funds to finance your idea and development, you should do the same but we a different set of mind in terms of how much you will request and if you can repay the debt. With that said, you need to research everything about the development of the commercial property before applying for the loan.
At Commercial Real Estate Loan Pros of West Palm Beach, we request a plan for your project so we can evaluate how much it will cost and if it is viable. As private lenders, we won’t ask you to fulfill many requirements nor be too extreme and strict with the conditions, but we do want to know about your plans and how you’re thinking to use the funds,
It is a basic procedure to understand your goals, know your development project, and be involved in it to a certain degree to access the loan you request. The main reason for this is because it isn’t a cheap investment. You must be aware of how much a commercial property and its development can cost, and either if it is small or big, you still need to go for a large amount of money for it.
Now, it is possible to have it with us as your lenders and we’ll make sure you’re able to access it without high-interest rates, unbearable conditions, and many requirements to fulfill.
How our commercial development loans work
Unlike banks, we won’t be strict when it comes to the requirements to fulfill an application nor to have the loan approved. To begin with, our interest rates are lower than usual to make sure the loan is possible to be paid in less time and with less effort. As we mentioned before, working on a project of this magnitude will be time-consuming and require a lot of resources to finish, which is also a bet, due to how much it involves and the expenses that won’t enter in the credit due to the ‘surprise’ fact.
With this clear, our loans for commercial development work around what you’re planning to build, the builders you contract, and the land you need to acquire. If you are going to apply for this loan, we also need to meet your contractors and determine how they work and what they offer. It is 100% crucial for the loan since we will directly work with the builders as well to establish payments and get the final cost of the property you’re going to build.
With this information, we will start working on establishing the terms such as the interest rate, time for repayment, and process to access the funds. Once you agree with them, we will provide the credit for you to start your project. Just keep in mind that the loan term is shorter than usual credits that go around property purchase.
Commercial development loans are based in fewer years or months, which means you have less time to pay but this is due to the nature of the project and the lower interest rate you access.
However, the basis of repayment and how it works is just the same as a regular credit for acquisition or property purchase.
Criteria for commercial development loans
We consider the experience of the person developing the property. But what do we refer to with experience in this case? Many businesses go for it since they have to hire contractors and builders for the project either way, which are the ones we discuss the building process and how much it will truly cost.
Now, some builders also request this credit to work on a development project for a company or business but they are usually the ones financing it but receiving a regular payment from the client. Therefore, ‘experience’ means if you are a new developer or not. If you are, you can still apply and get the loan, but you have higher chances when you’re an experienced developer.
We also consider the equity or deposit you can make for the credit. We don’t cover 100% of the expenses, but our ratio of how much you need to deposit for it is lower than any other institution and lender. Finally, the purpose, location, and profit potential of your development will play different roles during the decision.
However, we want you to know that these final ones don’t really influence greatly in our decisions. Even if you don’t fulfill every aspect or there are a few details, you can still apply and obtain your loan. Our team at Commercial Real Estate Loan Pros of West Palm Beach will make it possible for you with our great deals when it comes to commercial development loans.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: