Commercial Lending

Associates Home Loan of Florida certainly understands a strong component of starting a business is acquiring the needed funding. Our knowledge of the commercial lending industry and its non-traditional process can be a big asset. Commercial lending occurs when a funding entity loans money to a business institution. It has a tighter protocol than personal lending to individuals, which typically requires just mainly credit and background checks. Rules can vary by institution, but a common guideline of commercial lending is the total amount of funding lent is dependent on multiple variables that influence a business.Companies who participate in commercial lending are subject to the same ordinances of their home state banking laws, credit balances and credit reporting.

Commercial lenders often prefer to meet with business owners in person, with some even desiring to meet at the facility of the business. Lenders clearly understand that the success of the business will largely determine the repayment of the loan, so they possess loan officers who thoroughly analyze business plans.

Loan officers will evaluate the expected cash flow of a business plan to be assured that a company will have sufficient capital to manage any potential financial problems. Another important factor in commercial lending that a lender and loan officer will review is the loan-to-value ratio of a company’s property, with most lenders possessing an 80% LTV.

Credit does come into play in commercial lending. Lenders can decide to check the credit of a business that has been established for some time, or determine they must review the personal credit of the owner/operator of a new business.

The primary way commercial loans are funded for repayment is via collateral, and the significance can be the difference between a business being approved or denied.

Perhaps the most common type of commercial lending is “acquisition and development lending”. This involves financial entities awarding capital to companies based on the success probability of a plan for expansion and development. Upon a business being approved for this specific type of commercial lending, it is expected the money will be used to acquire and grow property to help the business prosper.

With our great proficiency in the commercial lending industry and its specific procedures, Associates Home Loan of Florida is capable of helping anyone in their quest to secure a commercial loan. Call (866) 257-9476 today.

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