What are small balance commercial loans?

A small balance commercial loan is a type of a loan that is offered on all types of commercial property. Higher balance commercial loans, usually above $1.5 million can have rigorous underwriting requirements, while small-balance commercial mortgages are relatively easy to get closed due to a streamlined under writing process. Along with less strict requirements, lenders can offer your commercial borrowers a greater selection of products and packages with more flexibility.

Who are these small balance commercial loans good for?

Small Balance Loans are perfect for when you are:

  • Turned down by a bank due to loan size or credit challenges
  • Want to cash out a large amount of equity from your existing facility
  • Don't report enough income on tax returns
  • Need a long-term fixed rate on a commercial property

Many small business owners are unable to get financing for Small Balance loans for a variety of reasons. However, we understand the unique obstacles you may face. You are more than a credit score or past financial challenges.

What purposes these small balance commercial loans are used for?

Our small balance commercial loans are used for the following purposes:

(1) Purchase

Whether you’re ready to own the building your business occupies or you’ve found a great investment property, we can help you get the money to purchase that building.

(2) Refinance

Have a high rate or balloon mortgage? Is the rate on your current mortgage adjustable? We can help you get the funds to refinance to a stable long term small balance commercial loan.

(3) Property Improvement

Looking to make renovations to your building? Whether you need a new roof or an expanded parking lot, we can help you get the funds you need to achieve your dream.

(4) Debt Consolidation

You can consolidate business credit card debt, pay off the IRS or state taxes, equipment leases and other monthly expenses with a small balance commercial mortgage from us. We’ll work to understand your financial needs and to develop a commercial mortgage solution that simplifies your billing cycle and lowers the amount you pay each month.

(5) Working Capital

Want to take advantage of some great deals you found on inventory for your business? Need money in the bank to cover bills while you wait for accounts receivables to clear? We can help put the cash in hands for your needs.

What small balance commercial loan products do we offer?

We offer two different kinds of products:

  • Our Core Program is expertly designed to fit vast majority of small-business owners and commercial property investors in the country.
  • Our Second program is for credit challenged buyers. Many small business owners are unable to obtain bank financing for a variety of reasons. However, we understand the unique obstacles that these borrowers are more than their credit score or past financial challenges.

    Max LTV 65-75% - Varies by property type. Final LTV’s and rates are determined by experience of the business owner, length of ownership, cashflow, strength of credit, and strength of commercial real estate.

What types of properties we can work with?

Most commercial property types considered, including but not limited to:

  • Mixed Use Buildings
  • Professional Office Spaces
  • Apartment buildings
  • Garage/Storage
  • Mobile Home Parks
  • Recreational
  • Day Care Centers
  • Bars/Restaurants
  • Retail (free standing/strip)
  • Warehouses
  • Motels/Hotels
  • Auto repair/Auto body shops
  • Funeral Homes
  • Houses of worship
  • Hair Salons
  • Other Property Types

What do you need to get the process started?

Depending on the loan amount, all we initially need is a completed 1003 form (or a business loan application), a tri-merge credit report which can be obtained for free from websites geared toward consumers as long as they contain scores and tradelines and a loan submission sheet outlining the details of any credit challenges (if applicable) and how the borrower plans to use loan proceeds. If there are multiple borrowers, we need a tri-merge credit report for each of them.

If there are Income Producing Properties involved in the deal, and/or, deal is above a certain dollar amount threshold (generally $1+ million), we may initially require Current Rent Roll, Last 2 Years of Operating Statements, Personal Financial Statements and Schedule of Real Estate Owned.

Once the deal is reviewed with these initial documents and appears to meet the underwriting criteria, a Letter of Intent (LOI) is issued to the borrower. The LOI outlines the terms and conditions, rate, term, amortization, loan amount, collateral, guarantors and all other pertinent information. Once the borrower accepts and signs the LOI, the loan file will be put through the process of full and complete underwriting to secure final approval. If additional documents or information is required, we will request from the Borrower at this time.

Our Fee Structure

    We charge only one Firm Fixed Fee for Services Rendered. For SBA/USDA loans, we adhere to the SBA’s guidelines for Fees and execution of the Form 159. For Non-SBA/USDA loans, our fee structure remains unchanged.

    Our Fees         Loan Amount

    1.0%              <$1,000,000
    0.9%              $1,000,001 - $2,000,000
    0.8%              $2,000,001 - $3,000,000
    0.7%              $3,000,001 - $4,000,000
    0.6%              $4,000,001 - $5,000,000
    0.5%               >$5,000,001

    For government-guaranteed loans, there are guarantee fees ranging from 2-3.75% charged by the federal government. The government collects loan guaranty fees so entrepreneurs (not the United States taxpayers) bear much of the cost of funding and operating government-backed financial assistance programs.

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