Low Documentation Loans
If all your standard qualifications don't meet the bank's expectations:
If you feel that the bank's requirements are rather onerous and require far too much capital for down payment, you've come to the right place. Easy loan approval options make owning commercial real estate a snap. Here's how our low documentation loans work:
- Down payment/Equity Requirement:
Easy loan approval from our Lending Partners requires between 20% and 25% down payment depending on the appraised value of the property. If this is still too much, consider a private second mortgage to help with your down payment requirement.
- EASY Cashflow Requirement:
If you are buying an office/retail building with multiple tenants, the lender will be looking for cashflow to cover the loan costs. However the lender will be much more flexible than a bank, which traditionally requires 1.2 - 1.3 x coverage.
- NO Net Income Requirement!
Now here's where we really do some magic to get you easy loan approval on low documentation loans. If you are purchasing or starting up a new business or have an existing business that does not show adequate cashflow for bank financing, we have options for you. We can provide financing up to 85% of the value of the property (15% down) with little or no financial statement information or proof of cashflow from your business. How's that for easy loan approval?
- EASY Documentation Requirements!
For properties that are occupied by the business alone, our lender will be looking for an appraisal before approving a low documentation loan. Easy loan approval - financial statement requirements can be waived if they are not available. The lender does not require a phase I environmental analysis for these low documentation loans, however the owner will have to fill out an environmental questionnaire and qualify for environmental indemnity insurance. If the property is multi-tenanted, the lender will require a tenant rent roll, and a detailed cashflow of revenue and expenses of the proposed property. To be approved for these low documentation loans, they will also want the personal guarantee of the principals of the company (both the hold co and/or the operating company). This means that as a principal of the company you will have to give full personal financial disclosure on your low documentation loan application and permission for the lender to pull a personal credit bureau. Often the lender will also pull a commercial credit check on the business before approving these low documentation loans.
- REASONABLE Pricing and Costs:
If we are lending on the equity of the property with little or no financial statement or net income requirements (a low documentation loan), you will be looking at slightly higher pricing than bank financing. We suggest taking a shorter term loan in order that we can try to fit you under bank financing and lower your interest rate within 2-3 years of property ownership. Getting "in" can be the most difficult part of commercial real estate ownership. Once you own, you will enjoy equity growth and most borrowers will eventually meet bank requirements or our other easy loan approval programs. Generally speaking Our Best Options Lender Partners price loans in the range of from Prime + 2% to Prime + 4% over the balance of the term. (Can be higher depending on risk rating). Loan fees are 2-3% points. Your appraisal costs are about the same as regular bank financing ($2500-3500 dependent on the property). Environmental insurance runs between $2000 -$5,000 again depending on the property and the industry. Legal fees are about the same as regular bank financing ($2500-$5,000 including your own solicitor representation).
- Timing for QUICK Approval:
For easy loan approval, send us your proposed property purchase details together with whatever financial statement information you have or can get on the property. We will contact you to take your personal loan application (of the shareholders), and will be able to get a conditional low documentation loan offer within 3 business days. We can have you closed in the time it takes to get the appraisal and environmental questionnaire completed.
- Assistance for Real Estate Purchase:
If you are looking to make a purchase but haven't yet found the ideal property, contact us and we will put you in touch with an expert in your area.
Best Options Product Information
ELIGIBLE PROPERTIES - We Can Provide Financing For A Wide Variety Of Properties:
These properties integrate residential spaces with commercial uses, such as retail or office space. Often these properties have a ground floor retail store or office with apartment(s) above, all in the same building.
Now one of the most competitive building classes in the country, these facilities are designed primarily for storage. This category also includes cold storage, RV and boat storage facilities, and truck terminals (transit facilities).
Designed for retail or office sales and display, this category includes stand-alone buildings such as offices, supermarkets, convenience stores, drug stores, department stores, bakeries, and beauty shops - as well as strip centers, and neighborhood and community shopping centers.
Warehouses/Light Industrial Properties
Single and multi-tenant facilities that are used for warehousing, light manufacturing, distribution, research, and development. Does not include buildings where heavy manufacturing or specialized industrial operations, such as welding, occur.
Includes everything from auto repair facilities to retail auto shops and part supply stores.
Special Purpose/Unique Properties
We will consider all commercial and unique properties that fall within our program guidelines and loan amounts, including day care and educational facilities, funeral homes, campgrounds, outdoor entertainment centers, trailer and mobile home parks and marinas.
With our industry knowledge and expertise, we feel we understand the non-flagged world of hotels and motels better than most lenders. Our valuation assumptions are based on facts relative to the specific property.
We offer competitively priced financing for a wide range of properties, including owner-occupied and leased facilities as well as fast-food and full-serve restaurants in neighborhood or urban settings.
We fund residential structures that contain five or more dwelling units in the same building. These multi-story buildings generally offer individual apartments for rent with common area facilities, such as an entrance, lobby, elevator, stairs, hallway, walks, or grounds.