At some point of time you might have to apply for a commercial loan. If you think that’s an easy job, you’re wrong. It’s not as easy to get a commercial loan as getting a home mortgage loan. The lender is concerned about collateral and repayment. Mortgages are easy to get. But, commercial fha loans Houston are a different story altogether. The process itself is very different. Given the current market situation, i.e. after the crisis, banks and financial institutions have become very selective. You need to prove to the lending institution that giving you a commercial loan is not a high-risk affair.
Planning, organization, preparation and follow through are a requisite when you want to apply for a commercial loan. It needs a lot of consideration. Before you apply for a commercial loan, you must consider some aspects. Here are some tips for you.
Need for Loan
Your lender would be interested to know your exact purpose for taking a loan and the repayment structure. Thus, investigate properly as to why you need the loan. Use a loan calculator to calculate the EMIs for different tenures. Tell them the one that you seem is best. Institutes like to deal with knowledgeable customers
Time of Loan
Generally the lenders would tell you that the loan could be processed in 30-40 days. This is not true. It generally takes up to 3 months to get the commercial loan approved. Thus, plan your requirement in time and apply early so that funds are available to you when you actually need it.
Amount of Loan
You must know the amount you wish to apply for. Ensure that the amount of loan will solve your purpose. Don’t apply for too much as it means more interest, whereas applying for less will not solve the purpose at all. If you wish to buy new equipment for $40,000 and you have no alternate source of funding, then you must apply for the full amount.
Visit Different Lenders
Don’t apply to just one lender, shop different lenders. First go to the lender you know. Discuss the proposal with them, and while they review your file you can check with other lenders in your area. By talking to different lenders you can compare their offerings and select the one that best suits you.
Prepare Your Loan Request
Before you go to the lender, get all your documents ready. If you want to buy new equipment, you will need the purchase invoice. Your recent financial statements would be needed as well. Along with the documents, prepare a letter with the reasons for your commercial loan request. Loan specifics like amount, interest, security, repayment and other conditions that you seek must be included in your request. Tell me about yourself, your business, competition, your plans etc. This will help the lender to understand you better. Make sure all the information you give is precise, accurate and verifiable.
If you receive multiple approval, then you can negotiate your loan terms and structure as well as your prepayment penalties and closing costs. Select the lender that gives you the best deal. Contact the other lenders and thank them for their time. You might need them in future!