AVANA CUSO Assists Through the Full Lifecycle of the Commercial Real Estate Loan Approval Process

The commercial real estate loan process is more complex than a residential loan. AVANA CUSO, one of the nation’s most seasoned commercial lenders funding loans up to $15 million, carefully guides credit unions and their borrowers through every step to ensure a quick and smooth closing.

Commercial Real Estate Loans at a Glance

Commercial real estate loans are specialized financing solutions designed to help businesses acquire, develop, or refinance properties used for commercial purposes. These loans support a wide range of projects, including purchasing office buildings, retail spaces, warehouses, hotels, and other income-generating properties. They are essential for businesses looking to expand their operations, renovate existing facilities, or invest in new real estate opportunities. At AVANA CUSO, we partner with credit unions to offer tailored commercial real estate loan solutions, providing competitive rates, flexible terms, and expert guidance to help businesses achieve their growth and investment goals.

The commercial loan process typically begins with the borrower supplying information to his/her credit union or broker, who then shares that information with AVANA CUSO. Next, AVANA CUSO reviews the information, determines if the borrower and property qualify, and sets the loan terms.

Then, an appraisal, and an environmental and commercial property inspection are engaged to value and inspect the property for any issues. After collecting and analyzing all the borrower’s financials, the appraisal report, the environmental report, and the commercial property inspection, the loan goes through final underwriting and a credit approval process before it is sent to the credit unions for review. If approved by the credit unions, loan documents are drafted, AVANA CUSO closes the loan with the borrower and the credit unions fund the loan.

How to Qualify for a Commercial Real Estate Loan

Candidacy depends on the type of commercial real estate loan to which you’re applying. The five major loan types include permanent loans, construction loans, SBA loans (including SBA 7(a) loans and SBA 504 loans), commercial bridge loans, and hard money loans. By working with the credit union, AVANA CUSO can help determine which loan is best suited for the applicant and their real estate investment.

No matter the loan amount or type, the lender will take a deep dive into the property operating statements, the financial statements of the property tenants, and the personal financials of the guarantors. Several methods can increase your chances of qualifying for a commercial real estate loan:

• Historical property performance demonstrating the ability to cover the proposed debt payments
• Diversified sources of cash flow and liquidity of the personal guarantors
• Relatively low debt
• An above-average credit score of the personal guarantors
• Commit to a larger down payment

To qualify for a commercial real estate loan, most lenders will only consider lending up to 75% of the value of the property.

What is Required for a Commercial Real Estate Application?

The first step in applying for a commercial real estate loan is to gather documentation that will give the lender visibility into whether or not you qualify. Typically, the application requires personal and business information, including your:

• Business history and cash flow
• Personal and business tax returns for at least the past three years
• Financial statements and projections
• Assets and liabilities
• Credit history
• Collateral and investor information

Should AVANA CUSO need additional information not provided upfront, the borrower will be guided through that process to ensure all proper documentation is provided to assess his/her application.

What are Typical Commercial Real Estate Loan Terms?

Commercial real estate loan terms vary based on the lender, loan amount, property type, and the financial strength of the transaction. Commercial loan terms can range anywhere from five to 10 years, with most loans having a maximum loan amortization of 25 years.

Commercial loan-to-value ratios range between 65% and 80%. Most loans also have a prepayment penalty if the borrower refinances with another financial institution.  

About AVANA CUSO

Established in 1998 and headquartered in Simi Valley, CA, AVANA CUSO offers competitive and collaborative commercial real estate loans. We partner with credit unions and connect them to investors across the United States. Additionally, we uniquely support and guide our partners through the entire full lifecycle of the loans from application to approval, supporting credit unions and borrowers through the complex approval process. AVANA CUSO is a proud member of the AVANA Family of Companies.