Business Tips: Commercial Construction Loan
Over the past couple of years, more companies have been trying to apply for a commercial construction loan. This is a good sign.Indeed, commercial construction is once again fast gaining ground after the worldwide economic slump. But before getting those power tools like the diamond blade ready, you may want to be sure you will have no problem with funding.For starters, commercial construction loans are loans that are given to companies for the construction of their buildings either for their own use or to be sold or leased to others. This kind of loan is harder to obtain than the more common and standard real estate loans for the reason that the structure is yet to be built.Applying for a commercial construction loan is a long process and understandably can get a little complex… if you don’t know how it works. But if you have the necessary documents ready, then it’s not going to be as hard as it seems. Hopefully, these will get you on the right track.Business or personal credit?If you are just starting your business, then you may use your personal credit history since you don’t have an existing business yet. But if you already have a licensed business, then your business history will be used.Weigh your optionsTalk to as many banks or lenders as possible. Know about their terms, options and interest rates. For immediate information, you can search them online, and from there you can already decide which could be best for you. Better yet, go in person so you will be able to talk to them and your questions will be answered. It is best to approach lenders that specialize in commercial loans. Ask for quotes and study your choices. If in case you do not qualify, hard money loans should be an option.Prepare the supporting documentsFor this you will have to show them a detailed plan of the property which should be supported by diagrams and architectural design. You should also be ready with a comprehensive business plan which you will have to show them, too. The goal is to prove to them that the construction’s value can cover the cost of the loan.That’s about it! If you are able to do this and have the necessary documents ready, then you should be good. If you are just starting your business, be sure you bring that entrepreneurial spirit wherever you go. And for established businesses, good luck as well and here’s hoping for a more prosperous business!