Financing For Your Commercial Property
Whether you're buying a commercial condo for your own business, an entire building for a number of commercial tenants, or multi-family residential properties of 5 units or more, First Foundation can help your business arrange the commercial mortgage that it needs.
Commercial mortgages can be fixed rate or variable rate, as well as open or closed terms. Construction financing for your commercial project is also available!
Commercial lenders will qualify applicants based on a combination of the following:
- Property Type
- The Debt Service Coverage Ratio (DSCR) or cash flow. *Usually lenders look for a DSCR of 1.25% compared to costs (mortgage payment, taxes, condo fees, utilities, etc.
- Down payment / equity
- Credit
- Environmental reports on the property
- Appraisals are typically required for commercial mortgages.
A commercial mortgage is not a business loan. It is a secured loan against a hard asset (real estate). It is not an operating line or a leasing arrangement, so it may not be suitable in all cases. That said, First Foundation has excellent commercial financing options for your business borrowing needs as well!
Give yourself more time to complete a commercial mortgage transaction than you normally would a residential mortgage.
Budget for higher closing costs (appraisal, legal fees, lender/broker fees, etc).
For commercial mortgages, it's your company that purchases the property. In most cases the shareholders of the company purchasing the property will need to provide a personal guarantee.
If you are purchasing or thinking of purchasing an apartment building, storefront, retail property, industrial property, an office space, or another type of commercial property, and are interested in discovering what First Foundation can do for you, please contact us.