Commercial Mortgage Lender Explains Credit Tenant Lease (CTL) Financing

There are many problems that a business will have to face and the most common one is a sudden requirement of liquid cash. In many cases, business organisations have crumbled down due to inability of the owner to meet the cash requirement. These days, there are different loan schemes that can be availed very quickly so that the owner can get out of the harsh situation easily. One of the most popular loan schemes is the credit tenant lease financing. This is also known as the CTL financing.

Knowing all about Credit Tenant Lease financing:

As already stated, the CTL is just one of the many financing schemes that banks offer to the customers. Credit tenant lease financing is a mortgage lending platform that allows customers to borrow money in order to purchase or renovate a single tenant building. The building may be used for retail, office or industrial purpose and this is up to the customer. The only requirement is that the building should be occupied by a credit tenant.

The process of getting a CTL finance is fairly simple when compared to other loam schemes. Also the structure of CTL financing is entirely different from conventional real estate loans. In the former, the property is considered as the collateral and all that the bank will be concerned about will be the market value of the property. But in the case of CTL, the lending organisation would consider the value of the property as well as the amount of revenue that the property will be able to generate in the future. In other words the CTL platform gives importance to the capacity of the company to repay the loan and this is taken as collateral.

Are you eligible for CTL financing?

The customer must have adequate credit rating. The credit tenant is the corporate entity that it must have investment grade credit rating. The rating should be given by a major rating agency as well. The general scheme is that any company or organisation that is rated below BBB- by the standard & Poors or Baa3 by Moody’s, is considered as a company that is not investment grade. And hence such companies will not be able to avail a credit tenant lease finance.

There are numerous financial organisations and banks that offer CTL finances to the customers. The reputation and the trustworthiness of the financial firms must be taken into account or else you may find yourself in a very tough situation.

Also it is wise to consult an expert in the field for opinion. This expert must be an experienced one and should know all about the different lending schemes and especially about the credit tenant lease financing. The internet can also be used to study all about the scheme before deciding to avail the loan.