Commercial mortgage planning
Commercial mortgage planning begins with the property, its intended use, the borrower or business that will own it, and the source of repayment. A storefront used by its owner, a leased office building, and a mixed-use property may be reviewed under different lender programs. Gather the facts before comparing a quoted rate or assuming a residential mortgage rule applies.
Define the property and transaction
For commercial mortgage planning, identify the address, property type, current condition, occupancy, purchase or refinance purpose, ownership structure, and requested loan amount. For a leased property, prepare the rent roll and major lease terms. For an owner-occupied business, explain the operating business and how much of the property it will use. If improvements are planned, include their scope, budget, permits, and timing. Existing liens and title questions should be raised early.
Prepare the commercial mortgage planning financial picture
Commercial mortgage planning should account for both the property and the operating business. A lender may ask for business financial statements, tax records, property operating results, lease information, borrower and guarantor details, assets, debts, and cash available for closing or reserves. Ask which figures the lender uses to evaluate repayment and how it treats vacancy, repairs, and changing expenses. Requirements depend on the specific lender and program; an advertised loan-to-value or debt coverage target is not an approval standard for every file.
Compare the financing structure
Discuss loan term, amortization, fixed or variable interest, fees, prepayment provisions, collateral, and any balloon payment. Ask how changes in property income or interest rate would affect the plan. If a qualifying small business will occupy real estate, the U.S. Small Business Administration describes its 504 program and the 7(a) program as separate possible channels through participating lenders. Those links do not establish that a NorthStar Funding lender offers either program or that a property qualifies.
For commercial mortgage planning, browse NorthStar Funding loan options or contact us with a high-level description of the property and goal. Use a secure channel for financial statements and personal records when requested. Terms, availability, and approval depend on current lender guidelines and the complete transaction.