As significant as the decision to go into business is, deciding to expand is even bigger. Not only are you taking on more responsibility, but you will need to take on a loan secured by your existing commercial property—or a commercial mortgage.
You have already done the hard part. A few years ago, you came up with a winning business idea, developed a business plan, obtained a loan, and opened your business. There were some growing pains along the way, but you powered through them.
Business is now going so well that you think it might be time to expand your operations. Maybe it is time to make your current place bigger or open a new office in another city. Whatever you want to do, there is one thing you are going to need—money.
Time to go to the bank and take out your first commercial mortgage, a loan secured by commercial property. There is just one question that has to be asked: How do you do it?
Step One: Talk To A Lender.
Before you start the process, it would be smart to find out what it entails. If you know a lender, make an appointment and talk to him or her. Find out what it would take to get approved for a mortgage in your area and what kind of interest rate you can get. This way if you don’t meet any of the requirements you don’t waste time and know where you have to be before you try again.
Step Two: Scope Out What You Want To Buy
After talking to a lender, you should have some idea of what you can get approved for. Talk to a realtor and ask them to point in the direction of locations you can afford that will meet your needs. They should also be able to tell you whether the seller is flexible on the price.
Before you move onto the next step, make sure you have your first choice in mind.
Step Three: Choose a Commercial Mortgage Lender.
If you already don’t have a commercial mortgage lender in mind, pick one out. Shop around a little to find who will offer the best rates and terms as well as the most money. Don’t rush the decision because it will affect how much you will end up having to pay back.
Step Four: Make An Offer
You know the location you want and how much you can get. Time to make an offer to the seller. Since you already have approval from a lender, you will be a more attractive candidate.
Step Five: Negotiate The Final Deal
As you negotiate with the seller, be sure and talk to your lender every step of the way. The quicker they are aware of things, the better. That way, if there is going to be an issue, they can inform you of it sooner.
Step Six: Time to Close on Your Commercial Mortgage
Once you have the deal done and approved, sign your commercial mortgage papers and get to work!
Dennis Dahlberg Broker/RI/CEO/MLO
111 Congress Ave |Austin | Texas | 78701