When you want to purchase commercial property in the Panama City, FL area to start up your own office, warehouse, or store, you’ll likely need a commercial building loan. Regardless of whether you’re going to build a brand new property on the land or revamp and existing one, knowing how to go about it can save you time so you can get to building your dreams faster.
First, you should know what lenders seek before they say ‘yes’ to your commercial building loan. They’ll look at business finances, much like they would if you were buying a residential property to make sure you’re good for it. They’ll also check your business’s credit score. And if you’re a really small business or just starting up, they will look into your personal credit to check for past financial problems. If you have a low credit score, it will likely prevent you from getting approval, so before you even apply for a commercial building loan, you should make sure you have everything squared away.
You should also know that the property you’ll finance via your commercial business loan serves as your collateral. You’ll be subject to a lien that will permit seizure of the property if you don’t repay it on time. For a commercial business loan, you’ll likely need to occupy a minimum of 51% of the building or else you should choose an investment property loan instead, ideal for rental properties on the beach.
Another thing you should know is that it can take a lot of time to go through the commercial building loan process. You’ll have to present a lot of documentation including as many as five years of tax returns; books, records, and financial reports for up to five years; projected cash flows; credit reports for your business, yourself, and any other owners or partners; state certification proving you’re a corporation or limited liability entity; third-party appraisal; and a business plan detailing the use of the property, just to name a few.
You can go through a bank but the process is the slowest of them all. Be prepared to spend a lot of time getting approved for your commercial building loan. For a faster process, you can go with a commercial lender, however the interest rates will be significantly higher.
Another alternative is to use a hard-money lender that will focus on the current and projected value of the property with less requirements in regards to your financial disclosures. The borrower receives funds secured by a real property and can be issued by either private investors or companies.
If you’re still not sure how to handle all the intricacies of a commercial building loan, contact Aloha Building Contractors Inc in Panama City, FL. We can help you figure out just what you need for getting your commercial property going from the ground up! Even if it’s north up in Callaway or Lynn Haven, FL too!