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How to shop for commercial mortgage
Investing in your business location can be a smart way to grow your business and increase revenue. Commercial mortgages give you the financing you need to make your business goals a reality. The comparison tools below can help you filter out the best deals available to you and your business.
What is a Commercial Mortgage?
A loan secured by a business's property is called a commercial mortgage. Commercial mortgages are used to buy commercial property, renovate offices, and even refinance existing commercial loans. Businesses often use them to buy or invest in apartment complexes, restaurants, office buildings, industrial complexes, and shopping malls.
Traditionally, commercial mortgages were exclusively offered by banks and credit unions and guaranteed by the Small Business Administration (SBA). However, a growing number of non-bank lenders, such as fintech lenders, insurance companies, and independent investors, also provide them.
How do commercial mortgages work?
Residential mortgages and commercial mortgages are very similar. In both cases, lenders will look into credit scores, credit background checks, and the size of a down payment when considering applications. However, there are significant differences between them to consider.
For instance, commercial mortgages have more stringent underwriting protocols. They also take longer and are more expensive to process than regular home loans. Interest rates are also higher when compared to regular mortgages.
How to compare commercial mortgages?
As with any source of credit, it's important to compare several lenders before choosing a loan. Don’t go with the first commercial lender that approves a loan application. Instead, contact at least three different lenders. Underwriting procedures can be very subjective and vary widely from one lender to another. The more lenders you contact, the better your chances of finding the best deal available.
Use the comparison tools below to filter out lenders and find the best option for your business's needs.