Are Commercial Real Estate Loans, right for you this time?

Commercial real estate loan is one of the remaining options, for businesses, when they run out of funding, for their next project.  It is easy to think of it as an alternative source of funds, but the consequences at stake is high, is you mishandled the process.  But, it may seem necessary to go ahead with it, considering that the only way to stay in the industry, is to upgrade your business in all aspect.  There is the manpower, logistics and the system.  They all need an upgrade, to be able to be updated with the technology.

Going back with commercial real estate loans, there are several factors that you need to consider.  The following are.

  1. Your needs. Please set down once again and study the need to apply for a commercial real estate loan. Is there no other source of funds?  Like selling a less important property? This will eliminate additional expensed, that will come with the monthly amortization. This will not put at risk any property that will be handed as collateral.
  2. It is essential for the application of a loan.  Is the right time to apply? Is the economy robust enough, to guarantee good income?  This must be considered, because you will be paying for the monthly amortization? What if the economy is not ripe enough?
  3. Alternative Source. You must come up with an alternative source of funds, to pay the loan. You cannot afford to lose everything, because of that loan. In fact, you need to gain from that.
  4. Acquiring a loan is not the only thing to consider. Think farther after the loan is granted.  If the loan is to buy a property for warehousing purposes, is it accessible? Is there a good planning and development in the area.  You will buy the property on double purpose. First, you will buy it to be used for your expansion, and secondly, you will buy it for investment too.

So, be smart with your decision. Is it an immediate need? Is there no alternate source of funding? Will this property be commercially profitable? Does the property fit our requirement?

Many question’s worth a thousand thoughts.  The answer is maybe a yes or a no. The ball now is in your hands.