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How to Get a Commercial Real Estate Loan

October 31, 2024/in Insights, Uncategorized

AVANA CUSO Offers Professional Guidance on Applying for Commercial Real Estate Loans Securing a commercial real estate (CRE) loan can be a transformative step for business owners and investors looking to grow their portfolios or expand their operations. However, the process can seem complex without a clear roadmap. At AVANA CUSO, we specialize in guiding borrowers […]

In the Know: Underwriting for a Commercial Loan

August 13, 2024/in Insights

AVANA CUSO Answers a Popular Question: “What is Underwriting a Loan?” As a commercial real estate lender, AVANA CUSO is no stranger to the loan underwriting process—a major step toward getting approved for a loan. AVANA CUSO is proud to say it has more than 20 years of experience producing efficient and accurate deliverables. This means that […]

How to Get a Commercial Real Estate Loan

October 31, 2024/in Insights, Uncategorized

In the Know: Underwriting for a Commercial Loan

August 13, 2024/in Insights

Full Sized Blog Element (Big Preview Pic)

How to Get a Commercial Real Estate Loan

October 31, 2024/in Insights, Uncategorized

AVANA CUSO Offers Professional Guidance on Applying for Commercial Real Estate Loans

Securing a commercial real estate (CRE) loan can be a transformative step for business owners and investors looking to grow their portfolios or expand their operations. However, the process can seem complex without a clear roadmap. At AVANA CUSO, we specialize in guiding borrowers through this journey. Here’s a step-by-step guide to help you understand how to secure a commercial real estate loan. Experienced commercial lenders carefully guide brokers, credit unions, and their borrowers through the commercial real estate loan process. Whether it’s finding the best rates and terms or simply understanding what a property is worth, AVANA CUSO has all the know-how for those looking to secure a commercial real estate loan.

The Most Important Step: Choosing the Right Lender for Commercial Real Estate Loans

Choosing the right lender for a commercial real estate loan is crucial because the terms, rates, and guidance provided can significantly impact the success of your investment. A reliable lender understands your business goals, offers flexible and competitive financing options, and provides personalized support throughout the process. They can streamline complex procedures, help mitigate risks, and ensure the loan aligns with your financial strategy. Working with an experienced lender like AVANA CUSO can make all the difference in securing the capital you need while fostering long-term financial stability.

What are Commercial Real Estate Loan Rates & Terms?

Commercial real estate loan rates can range from 2.2% to 18%, depending on the type of loan and the lender. AVANA CUSO offers competitive interest rates starting at 3.5%.

Commercial real estate loan terms generally start at 12 months and can run up to 10 years. AVANA CUSO provides loan terms ranging from five to 10 years, with amortization of up to 30 years.

Commercial real estate loan sizes can vary anywhere from $500,000 to north of $25 million depending on the asset. AVANA CUSO generally funds loans around $2.5-$5 million but has the network to facilitate a larger loan, around $25 million. The average loan-to-value (LTV) ratio spans 60% to 85%, with AVANA CUSO’s maximum LTV at 75%.

6 Steps to Securing a Commercial Property Loan with AVANA CUSO

To get a commercial property loan, take these six steps:

Provide all necessary information including business history, cash flow, personal and business tax returns, financial statements, assets and liabilities, credit history, and collateral information to your credit union or broker.
The credit union or broker then shares this information with AVANA CUSO, which reviews the data to determine if the borrower and property qualify. During this analysis, loan terms are set.
An appraisal, environmental inspection, and commercial property inspection are conducted to value the property.
The loan goes through the underwriting and credit approval process before it is sent to credit unions for review.
The credit union reviews all documents. If approved, loan documents are drafted.
Finally, AVANA CUSO closes the loan,n and the credit union funds it.

What SBA Real Estate Loans Are Available?

There are two Small Business Administration (SBA) real estate loans available: SBA 504 loan and SBA 7(a) loan.

Small business owners interested in long-term, fixed-rate financing of up to $5 million should apply for SBA 504 loans. To be eligible for this loan, a business must be a for-profit institution within the United States, have a net worth of less than $15 million, and have an average net income of less than $5 million after federal income taxes two years before submitting an application.

The SBA 7(a) loan is the most common of the two loan programs and is used to assist small businesses with special requirements. The 7(a) loan can be used when real estate is part of a business purchase, as long- and short-term working capital, to refinance current business debt or purchase furniture, fixtures, and supplies.

To be eligible for this type of commercial loan, businesses must be for-profit, considered a small business, operate in the United States, have invested equity, use personal assets before seeking finance, demonstrate a need, and more.

In the Know: Underwriting for a Commercial Loan

August 13, 2024/in Insights

AVANA CUSO Answers a Popular Question: “What is Underwriting a Loan?”

As a commercial real estate lender, AVANA CUSO is no stranger to the loan underwriting process—a major step toward getting approved for a loan. AVANA CUSO is proud to say it has more than 20 years of experience producing efficient and accurate deliverables. This means that we’re a competitive and collaborative commercial real estate lender, who mitigates risk by executing thorough reviews and due diligence to conform to regulatory requirements.

As such, AVANA CUSO is often asked key questions about loan underwriting, including the following:

What Is Underwriting a Loan?

Underwriting a loan is one of the final steps of the loan approval process. During underwriting, the lender will verify various financial information, including income, assets, debt, credit score, credit history, tax returns, bank or credit card statements, property, pay stubs and additional documents. The underwriter will also assess the property you intend to buy and associated documents, such as appraisals or inspections. A commercial mortgage underwriter is a financial expert tasked with reviewing your finances and assessing the risk the lender will take on if they approve your loan. The underwriter typically works with you through your loan officer.

How Often Does an Underwriter Deny a Loan?

Whether or not your loan is denied in underwriting typically depends on your overall financial health and circumstances. Several major reasons your loan may be denied include:

Insufficient Net Income
Low Personal and/or Business Credit Scores
Low Appraisal and High Loan Amount Ask
Inadequate Personal and/or Business Collateral
High Debt-to-Income Ratio
Property Issues

What Are the Potential Loan Underwriting Process Outcomes?

The loan underwriting process can produce four possible outcomes.

Denial: When your commercial mortgage application is denied, you will not be able to get the loan. If this occurs, find out the reason for the denial so you can make adjustments to your finances. When you improve your credit score or pay down your debt, for example, you can reapply for a loan.
Suspension: If your loan application is suspended, it generally means documents were missing from your file. In such a case, the lender will likely tell you if you can reactivate the commercial mortgage underwriting process by submitting additional information.
Approval With Conditions: Some approvals can be conditional. Lenders may ask you to provide business licenses, tax forms, insurance or other documentation before officially granting the loan.
Approval: An approval means you’ll receive the loan to buy the property or make adjustments to a current commercial property.

How Long Does Loan Underwriting Take?

Business loan or commercial mortgage underwriting typically takes longer than home loan underwriting. The process can take as little as two to three weeks, but usually takes 30 days or more. Business or commercial real estate loan applicants should receive their final decision one month after submitting their application.

About us

AVANA CUSO is one of the most seasoned credit union service organizations (CUSO) focused on commercial real estate. Established in 1998.

Half Sized Blog Element (Single Author Style)

Half Sized Blog Element (Multi Author Style)

How to Get a Commercial Real Estate Loan

In the Know: Underwriting for a Commercial Loan

How to Get a Commercial Real Estate Loan

In the Know: Underwriting for a Commercial Loan

Full Sized Blog Element (Big Preview Pic)

How to Get a Commercial Real Estate Loan

AVANA CUSO Offers Professional Guidance on Applying for Commercial Real Estate Loans

The Most Important Step: Choosing the Right Lender for Commercial Real Estate Loans

What are Commercial Real Estate Loan Rates & Terms?

6 Steps to Securing a Commercial Property Loan with AVANA CUSO

What SBA Real Estate Loans Are Available?

In the Know: Underwriting for a Commercial Loan

AVANA CUSO Answers a Popular Question: “What is Underwriting a Loan?”

What Is Underwriting a Loan?

How Often Does an Underwriter Deny a Loan?

What Are the Potential Loan Underwriting Process Outcomes?

How Long Does Loan Underwriting Take?

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