Chinese (Simplified)EnglishGermanSpanish

Has the commercial property loan market gotten any better?

Mar 1, 2018 | Article, Blog

Until a few years ago, the property loan markets were so bad that borrowers had a difficult time getting a loan. This had an unfortunate impact on the real estate industry as a whole. Once people stopped getting loans, property remained unsold, and this caused worse market impact. Also, the lenders who did agree to lend money for buying property had rigid specifications for the borrower. This made it difficult for the borrower to fulfill the conditions. Even if they did get a loan, they could not repay it, owing to the difficult terms. So, the last few years were indeed very bad for the property loan market.

However, things are better now. While you do not always have a loan approved, you have a better chance than before of getting a loan to buy or renovate property. Also, lenders are more open to flexible bargains. So, you can get better loan terms and lower interest rates on the loans. Indeed, this is a great time to be a property investor, with so many options on offer.

Here are some of the current market trends.

Lender types

Banks and credit unions as well as private lenders are offering commercial loans for property. Even insurance companies are looking to invest in a booming market. So if you are planning to buy property, this might be a good time for you. Once you have a loan on your hands, you can easily buy property, rent it out, sell it, or renovate it.

Private loans

Private loans have always been around, for those who failed to get a bank loan. However, private lenders are more flexible now. Instead of the short-term loans, you can now apply for loans with 5 or 10 years maturity time. Loans also carry interest less than 5 percent. Similarly, lenders are willing to finance more than 70 percent of the property value. That said, your property must have a good record, it should have proven value, in terms of revenue generation.

Apartment buildings are in demand

All lenders are offering favorable terms and conditions for those looking to buy apartment buildings for investment. So if you want to get a loan approved, you might want to consider in a revenue generating apartment building. You can approach banks and private lenders to get you the type of loan you want.

Bank loans for commercial property

If you are planning to invest in commercial property such as retail, office buildings, factories, you will find bank loans easier to get. Also, these loans are cheaper now, than a few years ago. The condition is that the property should be generating revenues consistently.

More choices for borrowers

If you fail to get a loan through a bank, you can approach private lenders for funds. They are more flexible in the terms and conditions. They will carefully consider the property and the revenue it can bring in. This is particularly important if your property has not shown consistent performance but can generate rent or profit on sale, if renovate, or refitted.

Source: www.commerciallendingx.com

Have More Questions About This Article? Feel Free to Contact Us.

7 + 13 =

Covid-19 and Commercial Loans Trends 2021

What is the biggest challenge you anticipate in 2021 as a direct lender or financial intermediary in commercial real estate? In 2021 it will be challenging to meet the business needs of Borrowers using hotel/restaurant properties as collateral to secure their loan. In...

Small is Beautiful: The Revival of US Rural Areas

Year of 2020 was no like other. It looks like the Covid-19 pandemic sent the crowded urban life style preferred by many bohemians and younger professionals in the past as new migration trends are identified by moving companies. BTW: Moving industry is the one sector...

Construction Loan Programs: The 3 Key Benefits to Consider

The purpose of a construction loan is to finance the building of a new residential real estate property. The projected market value of the subject property is used to secure the lending and the loan proceeds are distributed by the Lender via separate “draws”....

10 Common Pitfalls to Avoid in the Fix-and-Flip Process

Fix-and-Flip projects are generally seen as promising business opportunities that can generate quick cash profit and good return-on-investment (ROI). An entrepreneur may need to completely transform a property or simply do some tender renovations before the building...

Real Estate Investment Strategies: Fix-and-Flip or Buy-and-Hold

Many real estate entrepreneurs are purchasing properties with the idea of receiving good return on investment for their cash and increasing their wealth. A business person can choose to implement both the Fix-and-Flip or Buy-and-Hold strategy and the decision depends...

Our Success Story: 130 Coolwater Lane, Barstow, CA 92311

Universal Commercial Capital (UCC) focus is on finding the right financial solutions for customers that may experience issues with obtaining a business purpose loan from lending institutions as banks. Our team is dedicated on assisting each and every Borrower receives...