Tips on applying for a commercial real estate loan:
- Provide complete and accurate information. Include tax returns, operating statements and rent rolls, both current and historic.
- If you are asked to complete a commercial loan form, be sure to fill every applicable blank space.
- Provide a concise but complete "story" or business plan in the form of a "Commercial Loan Request." Big packages go to the bottom.
- Don't hide any problems. Tell me where "the hair" is.
- Give strengths vs. weaknesses, and include any mitigating factors.
- Provide pro-formas and budgets.
- Provide biographical information including activities with similar commercial properties, if possible. Similar, successful experience is a big plus.
- Address capitalization, sponsorship and liquidity. Where is the money coming from to make the down payment, what reserves will be provided, what are sources of cash flow if there is a chance the property will not cover the debt service adequately? Are outside lines of credit available?
- Tell me about the market for your commercial property.