If your company has no track record or credit rating, that does not mean it will not be approved for a commercial mortgage loan. However, the owners may be required to guarantee the loan with personal assets. If the owners fail to repay the loan, the commercial lender can reclaim the monies from them. For business leaders, there are no programs comparable to FHA or VA loans in residential mortgages. There is also no private mortgage insurance. Thus lenders rely on the property as collateral in the event of a default.
Rates of Commercial Lending
Commercial mortgage lending rates are expected to be between 1 and 2.5 percent higher than residential mortgage rates. You, of course, want the greatest commercial credit rate available. However, much is determined by your credit history, the nature of your business, the quantity of collateral, and loan characteristics.
Commercial Loan Suggestions
When completing the application, accuracy and documentation are critical. Inadequate information is the most common cause of loan denial. Include all pertinent financial details, as well as evidence of loan payback capabilities. Revenue predictions, cash flow, tax returns, and bank statements are examples of the latter. A well-thought-out, detailed company plan is a must. You should have solid credit and a track record of meeting your financial responsibilities on time.
If your documentation appears jumbled, contact an accountant ahead of time to check over it and ensure everything is in order before submitting the loan application.
You should not apply for more than one commercial loan at the same time. This is because the lender will verify your credit score, which may decrease a few points. If you apply for multiple loans in a row, the various lenders who evaluate your credit may end up considerably lowering it. Apply for the loan that best suits your needs and has the best chance of being approved.
What Texas Security Bank Can Do
Texas Security Bank takes pride in offering the best commercial loans for our customers’ needs. We provide lending flexibility based on the specific needs of the business. For example, a seasonal business will require different alternatives than a business with a consistent financial flow. We personalize loans to each client after researching the company’s activities and goals. Texas Security Bank can provide you with finance for new equipment, new property, working capital, or other kinds of expansion. Please make contact with us today to set up a consultation.
As part of its objective of Elevating the Champions of Free Enterprise, Texas Security Bank wants to enhance value for independent business owners by providing executive education and business owner education through the TSB Academy and TSB Speaker Series. We all know that information is power in the hands of a business owner. More information can be found in the Business Education section of our website.
