A commercial real estate loan can help to provide your business with the funding it needs to meet your goals. The application process, however, can be a bit complex. Here are a few mistakes to avoid to help you ensure that the process goes smoothly.
Not Shopping for the Best Deal
It’s tempting to go with a bank you know. The thing is, however, that you have countless options out there. Check with several different lenders and compare your options carefully to find the best deal for your needs.
Neglecting to Check with the SBA
Even if you don’t qualify for any of the loans offered through the SBA, it’s always worth checking. You may also find some valuable advice that can help you succeed. If you do qualify for an SBA-backed loan, you may also be able to find suitable lenders that can offer you the best deals.
Not Having a Business Plan
A business plan provides you with a roadmap to success. It’s not just vital for you, though. It’s also essential for obtaining financing. Providing your business plan can help make the decision process easier. You should also make sure that you have a plan as to how you want to use the funds and how you’ll be able to pay the money back.
Ignoring Your Balance Sheets
Review your balance sheet before you start applying to get a better understanding of your cash flow and liabilities. This will give you a better understanding of how much money you’ll have left each month after making your monthly loan payment to run the property properly.
Applying for a commercial real estate loan requires a substantial amount of documentation. Not having everything you need could delay the process, meaning that it’ll take even longer to obtain financing. Staying organized and gathering all of the essential documents ahead of time will help to ensure that everything moves according to schedule.
Not Having Any Money to Invest in the Deal
Lenders want to see that you’re willing to risk some of your own money, too. The more money you have to put down, the better your chances of being approved. You may also be able to secure better rates.
Forgoing a Lawyer
A lawyer isn’t a requirement, but not having one could cost you the deal. An attorney that’s well-versed in real estate (particularly commercial properties) is an invaluable asset for negotiating the types of deals you’re seeking.
Getting a commercial real estate loan can be a long and arduous process. Avoiding these mistakes, however, can help to ensure that you get the funds you need to achieve your goals.