Are you considering purchasing a property for your business? If yes, you will need a commercial mortgage loan. Below mentioned explains in detail the process of qualifying for a commercial mortgage:

  • Evaluating your finances

You must know if you will be able to make your scheduled monthly payments. Most lenders will need proof that your business can repay the loan. At this stage, it would be wise to take into account the maximum amount your business can afford to pay monthly.

  • Finding the right property

Half the battle is finding the right property for your business. Additionally, you will also need to think about what you require from the property. See if it meets all the necessary health and safety requirements. For example If your business frequently transports goods, you have to ensure the property is close to transport links.

  • Identifying the right mortgage lender

There are several lenders to approach when considering a commercial mortgage loan. You have to do your due diligence and identify the right lender for the best rates and deals. You can approach your bank or a specialist commercial mortgage broker and understand what deals and rates they offer. They can even offer expert advice and find the right product based on your needs.

  • Business cashflow

For a business to thrive, it needs to have good cash flow. Cashflow ensures your business pays bills, wages of staff and expenses on time, including taking advantage of potential growth opportunities. Before applying for a commercial mortgage assess your business cash flow. All lenders will need evidence of your business cash flow for your commercial loan to get approved.

  • Developing a business plan

Most mortgage lenders will need plenty of information before they lend you the money. They will need you to define your business, including what type of business you’re in, and what are you doing to make it profitable. If your business is new, ensure you have all the necessary paperwork and permissions. The more detailed your business is, the more confident lenders will be in approving your loan application. The plan should include:

  • Type of business
  • Product or service you’re selling
  • Your customers
  • Your pricing
  • Future projections
  • Produce credit reports

In addition to lenders wanting to know about the financial stability of your business, they would also like to see your credit report. The credit report may include paystubs of company accounts. Taking the extra step in preparing your credit report shows the lenders you are financially secure. However, make sure you resolve any credit issues before applying for a mortgage.

The more details you can provide the better it is for you when applying for a commercial mortgage loan. Keep in mind, that lenders love asking questions and giving complete answers makes them more confident to approve your commercial mortgage application. If you want to find out more information about commercial mortgage loans, or how they can benefit your business, please do not hesitate to reach out to our team at Sure Loan For You today.