Looking to Purchase a Commercial Building?
If you're in the market for a commercial building purchase, financing can be a major hurdle. That's where Texas Mortgage Capital Corporation comes in. We offer commercial building purchase loans that can help you acquire the property you need to grow your business.
What is a Commercial Building Purchase Loan?
A commercial building purchase loan is a type of financing used to purchase a property for commercial purposes. This loan can be used for a variety of properties, such as office buildings, warehouses, shopping centers, and more. These loans are typically secured by the property itself, making them a form of asset-based lending. This means that the lender focuses primarily on the value of the property rather than the borrower's creditworthiness.
How Does a Commercial Building Purchase Work?
When you apply for a commercial building purchase loan, we'll evaluate the property's value to determine how much you can borrow. This is known as the loan-to-value (LTV) ratio, which is the percentage of the property's value that the lender is willing to lend. For example, if the property is worth $1 million and the lender is willing to lend up to 75% of its value, you could potentially borrow up to $750,000.
Once you're approved for the loan, you'll typically make monthly payments that include both the principal and interest. It's worth noting that hard money loans often have higher interest rates than traditional loans. However, they can be easier to qualify for and provide faster funding.
Do I Need to Provide Collateral for a Commercial Building Purchase?
Yes, collateral is typically required for a commercial building purchase loan. As we mentioned earlier, the loan is secured by the property itself. This means that if you're unable to repay the loan, the lender has the right to seize the property to recoup their losses. The collateral acts as a form of security, which can help reduce the risk of the loan.
What are the Eligibility Criteria for a Commercial Building Purchase?
The eligibility criteria for a commercial building purchase loan can vary depending on the lender. At our hard money company, we typically require the following:
- A minimum credit score of 550
- Evidence of income to support the loan payments
- A property appraisal to determine its value
- A clear title for the property
- A down payment of at least 25% (this can vary based on the property and other factors)
In addition to these criteria, we'll also evaluate your experience in managing commercial properties, your business plan for the property, and any other relevant details.