5 Considerations when Shopping for Commercial Real Estate Loans
Commercial real estate loans allow businesses to expand into larger spaces, open new locations, and increase their earning potential. If you've discovered that your business's location no longer serves your needs or if you see an expansion in your horizon, take these factors into consideration as you shop for commercial real estate loans.
1. Calculate the Total Cost of Moving to a New Location
Securing a loan for the real estate is an important step of moving your business to a new location, but you also have to consider other costs. For example, if you're opening a new location for your restaurant, you'll need all of the equipment and appliances required to outfit your commercial kitchen.
Your bank will want to see a business plan that outlines all of your opening and operating costs. Not only will research and specificity help you get a loan at a good rate, but it will also prevent surprises down the line.
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2. Check Your Credit Score and Financial Records
Before you shop for commercial real estate loans, organize your financial records and keep your credit score as high as possible. Depending on your business's structure, you might need your personal credit scores as well as your business credit score.
If you have any negative marks on your credit scores, attempt to remove them before you apply for a loan. Make sure you can explain any issues with your financial history, such as a bankruptcy or a sudden dip in business revenue. The more you know about your financial situation, the easier it becomes to obtain commercial loans.
3. Analyze Every Facet of Your Proposed Location
Your lender will also want to know about the proposed location for your business. For instance, if you're buying a retail storefront, your bank may want to know whether it's visible from the street and whether or not the area attracts foot traffic.
If the building has housed failed business ventures in the past, find out why, then decide how you'll avoid falling into the same trap. Note any maintenance issues the building might impose as well as any upgrades you might have to perform.
4. Don't Automatically Choose a Big Bank
Working with a community bank can be advantageous if you are seeking a commercial real estate loan. Community financial institutions like Seacoast Bank are committed to stimulating the local economy. We get to know our customers, and look at the whole picture for our loan applicants. Many big banks don't bother.
5. Find a Bank With Excellent Customer Service
Buying commercial real estate is a tremendous step in your career. Whether you've been in business for two years or 20, you're taking a risk -- and so is your bank. You'll want to work with a bank like Seacoast that offers excellent customer service so you know that you'll get your questions answered and your concerns addressed. We are committed to providing the highest level of service to our loan customers.
When you're shopping for commercial real estate loans, get all of your paperwork in order and take a look at your finances. When you're ready to move forward, get in touch with us for a commercial real estate loan offer.