A Well Prepared Commercial Real Estate Loan Application...
Lessens The Hassle & Fees...
Plus It Gets Results!
Let’s imagine that you’re ready to apply for a commercial real estate loan.
Maybe…
- You’re sick and tired of renting your commercial space, throwing away your money every 30 days AND would prefer to own your own commercial property.
- You don’t have enough space to run your business, parking has become impossible, and you’re afraid the fire department might label your operation a fire hazard.
- You’d like to multiply your earnings exponentially by investing in commercial properties as a cash flow producing asset.
- You want to refinance a commercial property that you already own to get cash out to expand your business or to get better terms.
You’re ready to go to your local bank or seek out a private lender or business loan broker.
I hate to be the bearer of bad news. But like all the borrowers who came before you, you’re going to have to go through the infamous - Loan Process.
And a process it is indeed!
This is the beginning of our 7 Day E-Course Series that shows you how to get through the entire commercial real estate loan process without...
- Waiting 6 months to close
- Loosing $1,500 or more in non-refundable fees
- And without the 34% chance of rejection
That process begins with the application. Here’s..
Your Questions
What can I expect at the application phase of the commercial real estate loan process and how can I decrease the usual hassle of commercial financing?
Can You explain the application documentation requests in further detail?
Which of the three credit scores will they use to determine if I qualify? The..
- a) Highest score
- b) Lowest or
- c) Middle
How can I avoid paying unnecessary non-refundable fees at the application phase of a commercial real estate loan?
Real Answers
What can I expect at the application phase of the commercial real estate loan process and how can I decrease the usual hassle of commercial financing?
Practical ways to decrease the traditional hassle of securing a commercial loan is to:
- wait until the right time to submit the right documents
- Know what documents to submit and when
Thankfully, you do NOT have to provide every single document up front.
In fact, most of the documents won’t be requested until we get to pre-approval and processing. So, let’s focus only on application documentation requests for now.
To get a pre-approval from most commercial banks and lenders, they’ll 1st request these documents from you or your broker…
1) The 1003 Loan Application and/or a detailed Personal Financial Statement (PFS)
2) A Tri-merge credit report
3) Financial statements (also known as Income and expense statements or profit and loss (P&L)statements ) for the last two years and year to date for the property and the business
4) A signed rent role (if applicable) and
5) Quality pictures of the property
Often business owners view getting their financial documents together as a huge hassle.
Why?
Well, because their taxes for last year may not be filed yet, or they may not be keeping great records of their monthly financials.
At Guide-to-Business-Loans.com we have a system that will help you get all the documents you need together in a timely fashion.
Our system includes working closely with you and your professionals to get everything done.
We also provide you with more practical suggestions on what to do about this in the bonus recording on Day 2 of this e-course.
Can you explain the application documentation requests in further detail?
Yes of course. Here are more details for each.
1) The loan application and/or detailed personal financial statement
There is a standardized loan application used in residential lending called the 1003 loan application. Many commercial lenders will accept this as the initial application while others will not.
Click here to view the 1003 loan application form.
For those lenders that won't accept the 1003, their application is basically a some version of the personal financial statement(PFS). Some PFS are more detailed than others, but the concept is basically the same as the 1003 loan application.
It calls for detailed explanation of your financial picture including your income, assets, liabilities, employment status, and the like.
Click here to view the personal financial statement form.
2) A tri-merge credit report
This is where the broker or lender will pull your FICO scores from all three of the major credit bureaus. (Hence the term ”tri-merge.”) The three major credit bureaus are…
- Trans Union
- Experian &
- Equifax
Let's say that they have a minimum credit score requirement of 660 in order to qualify for a commercial real estate loan.
Which of the three credit scores will they use to determine if I qualify? The..
- a) Highest score
- b) Lowest or
- c) Middle
Good question.
The real answer is…
They'll choose the score that is the middle of the three. So if your scores are…
- TransUnion – 780,
- Equifax – 690, and
- Experian – 710
They will accept 710 as the score that pre-qualifies you for the commercial real estate loan because, it’s not the highest or the lowest, but the middle score.
Credit bureaus charge a fee every time a credit report is pulled. In many cases, that fee is passed onto you, the borrower, either at application, pre-approval, or closing.
3) Financial statements for the last two years and year-to-date for the property and the business.
Financial statements are also known as income and expense statements or profit and loss(P&L) statements.
Because the financial statements for the business and property from previous years are recorded on the tax returns, most commercial lenders will request the tax returns at the application phase as well.
However, if you do have your profit and loss statements for the last two years, they’ll most likely accept these until the processing phase of the process.
This item is often among the most difficult to produce for business owners because they may not have filed their taxes yet or they may not be in touch with their accountant on a regular basis.
Utilizing our system at Guide-to-Business-Loans.com will work out perfectly. Just give us a call and we’'ll communicate with your accountant and other financial professionals to get your package together.
It's imperative that you get this information to the lender. If you don't, then you won’t make it to the next phase of the process - Pre-approval.
To view a commercial property profit and loss (P&L) form, click here.
4) A signed rent roll (if applicable)
The rent roll details all of the…
- Tenants
- Rents
- Lease begin and end dates and
- Units square footage
To view the rent roll form on an apartment building click here.
To view the rent roll form on a strip mall or office building click here.
5) Quality pictures of the property
Take the time to send quality pictures to the lender. The more pictures you send the more accurate the lender’s portrayal of the property upfront.
Soon, the appraisal will be done and pictures will be taken anyway. The lender will certainly find out the whole truth about the property.
And they’ll feel better about you as a borrower if you disclosed everything about the condition of the property upfront.
How can I avoid paying unnecessary non-refundable fees at the application phase of a commercial real estate loan?
Taking quality pictures upfront is also a way to protect yourself from paying up to $5,000 in non-refundable third part fees.
Which would you prefer... for the lender to find out how the property really looks before you get your hopes up and pay for an appraisal or afterward?
Most would agree that BEFORE paying hundreds even thousand dollars it's much better to submit pictures so lenders can come into the deal with all of the facts upfront.
Yes, something as simple as taking quality pictures of the property upfront can save you headaches, hassles, and potentially thousands of dollars on a commercial real estate loan!
Which leads us to another thing that you need to know about fees. It has to do with what’s called “packaging a loan.”
Sometimes, when you apply for any business loan, you’ll have to take all of your documentation to a 3rd party packaging company to prepare your application, your financials and your other documents. A bank will send you to a 3rd party packager because they don’t have the time or expertise to do it themselves.
Be prepared to pay at least $1,500 maybe even more to the packaging company. Also, be aware that you’re paying these packaging fees before the approval process even starts, regardless of whether or not your loan is approved.
So that gives you some perspective of why hiring an experienced finance consultant or loan officer is important. You could spend all that time, hassle, and $1,500 or more for nothing!
Do you realize that many lenders will advertize their low, low interest rates to...
- get prospects in the door
- get them excited about the loan process
- tell them that all the big packaging and application fees are normal and not to worry because they’ll probably be approved.
They do this with loan officers fresh out of college who don’t even know the SBA from the SPCA! You see how that’s a problem?
At Guide-to-Business-Loans.com, we help you protect yourself from paying these fees to a 3rd party packaging company.
We’ve already taught you, in today’s session, how to put together a pretty solid package of your own.
Not only that, if you allow us to, we’ll lend you our expertise and do it for you. And we’ll do it without the hefty $1,500 packaging fee of course!
Also, many lenders and brokers will charge you an application fee before you even get pre-approved for a commercial real estate loan.
The good news is that there are few good lenders and brokers out there who are willing to waive this fee. Where can you find them?
You guessed it! Guide-to-Business-Loans.com will NEVER charge you an application fee. It's just one more way that we add value to your experience with us.
To get started with our Pre-Application Consultation Program call (800) 778-5631 anytime 24 hours a day, 7 days a week.
In the meantime, feel free to listen in to our recorded BONUS message below. It will answer this BONUS question for you...
BONUS RECORDING - What if I’m not yet ready to buy or refinance commercial property? Instead, I am ready to get prepared to qualify.
It looks like we can wrap up the application phase of the commercial real estate loan process right here.
In conclusion, if you…
- Provide the above commercial real estate loan application documents and
- Meet the qualifications for commercial real estate loan financing
You’ll soon receive a pre-approval letter for your commercial real estate loan!
Let's spend more time on exactly what is required in order for you to qualify in Day 2 of
This "7 Day Commercial Loan Process Mini E-Course.
After that, we'll head over to the Pre-Approval phase and see what happens next.
- Return From: The Commercial Real Estate Loan Application That Get's Results! (Top)
(630) 755-6979
If you would like to learn...
How to get through the entire commercial loan process WITHOUT...
- Waiting 6 months to close
- Loosing $1,500 or more in non-refundable fees
- And without the increasing chance of rejection
For $169 FREE...
Here's your chance.
When you finish this “7 Day Commercial Loan Process Mini E-Course!”
You'll understand how to do all of the above.
You'll also know how to quickly and easily qualify for a commercial loan.
When you get your copy, we're certain you be pleased with...
- How much time, money, and energy you save
- How much your cash flow increases
- How your loan actually integrates with your goals and dreams and
- How your bottom line skyrockets
Click here to get started.