If you think you can't get a commercial loan in today's market, think again! Today, we closed escrow on a self-storage facility in South San Francisco. I am going to describe the terms of this commercial loan for you so that you can get an idea of the appetite for these type of loans, and what was required by the lender to get it approved and funded.
This commercial loan was for $3,500,000. My client refinanced his building in order to consolidate the three outstanding loans on the property, and to get cash-out. He used the funds obtained to pay down outstanding consumer debt. 
In today's lending environment, obtaining cash-out with a commercial loan is not easy.
Here are the terms of this commercial loan:
- 6.25% fixed for five years
- 25 year amortization
- 10 year term
- 1 point origination fee
The bank also wanted an environmental report. This report cost approximately $1800, which my client had to pay for upfront also.
Qualifying for a commercial loan is different than qualifying for a residential loan. The lender's main concerns are the type of property, and the cash-flow of the property.
The type of property is important because certain types of commercial property are easier to sell, in case of default, than others. For example, an office building with many different businesses leasing space has more potential buyers than that of a single use facilty, such as a gas station.
The cash-flow of a property is important because a lender wants to be able to generate income from the property in case of default. My client has very good cash-flow because he has done a great job keeping a large percentage of the units in this South San Francisco self-storage facility rented. I am convinced this high-occupancy percentage and the amount of equity are the main reasons he had his commercial loan approved.
Helping building owners and buyers obtain a commercial loan is one of the services I provide. If you need this service, click here and describe your needs. I will do my best to find the best terms for you!
Do you need help structuring a loan, or getting a rate quote? Call me at (650) 222-0386, or e-mail me.
This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change without notice. This is not an offer to enter into a rate lock agreement under any state law.
