Edward Shin of Noah Bank is proud of the fact that Noah Bank offers a wide variety of commercial real estate options for business owners looking to acquire property for expansion or relocation. Noah Bank offers commercial loans (c-loans), business term loans, SBA 7(a) loans, business lines of credit, and more depending on a business’s individual needs. Although a business owner who is interested in a c-loan or other form of commercial credit should speak with one of Noah Bank’s expert loan officers, here are a few points to keep in mind before applying for a loan:
It’s a Completely Different Process from When You Bought a Home: One of the biggest misconceptions business owners have is that applying for a commercial real estate loan is going to be the same as applying for a home mortgage. Unfortunately, commercial loans tend to be a bit more complicated and will have stricter requirements. You will need to speak with a loan officer beforehand to determine which loan is right for you. For example, SBA 7(a) loans generally are more forgiving if you qualify and will occupy a certain percentage of the property.
There Are Five Basic Requirements You Need to Qualify for a Commercial Real Estate Loan: While the underwriting process will differ depending on the type of loan and the financial institution, there are five things any loan underwriter will look for when determining your ability to pay back the loan.
- Your Credit Score – 680 or above is usually needed
- No recent bankruptcies or tax liens
- Established business history
- 15% down payment
- DSCR of 1.25X or higher
Be As Organized as Possible: This is actually similar to applying for a residential mortgage – the more organized you are with your paperwork, the quicker the process will be. Plan to have all of your financial records, a business plan, financial projections, the resumes of managers, and other pertinent paperwork. This will ensure there are no curveballs or delays as you go through the underwriting process.
For more information, please visit www. noahbank.com
* All loans are subject to credit approval
**DSCR: Debt Service Coverage Ratio