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Conventional Commercial Loans
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Loan Purpose
Purchase commercial real estate, purchase machinery, equipment, fixtures and furniture, working
capital, inventory, refinance debt, cash-out debt refinance.
Loan Amount
Up to $4,000,000.
Time to Close
Commitment Letter within 3 days of completed application! Closing within
30 – 45 days of signed commitment letter.
Loan To Value
Up to 90%.
Interest Rate
Based on a spread over the 30 day LIBOR rate, adjusted monthly.
Term
Up to 25 years, fully amortizing over the life of the loan. No balloons.
Prepayment Penalty
No prepayments allowed the first year of the loan. Prepayments will be assessed a minimum penalty
of 5%, 4%, 3%, 2% and 1% of the loan balance in years two through six.
Fees
1 - 2% origination fee.
Good faith deposit to be used for loan closing costs.
Collateral
The loan must be fully secured by commercial real estate or a combination of commercial and
residential real estate.
Recourse
The loan must be guaranteed by at least one principal who owns 20% or more of the borrowing entity.
The guarantee of affiliated companies may be required based on the percentage of ownership of the
affiliate and the borrower's relationship with the affiliate.
Debt Service Requirements
A minimum debt service coverage ratio of 1.25 times is required.
Industries
Loans can be made to for-profit businesses except those involved in nuclear waste, utilities, natural
resource development, fishing vessels, biotechnology and internet technology.
Other Considerations
Appraisal and Environmental reports will be required for real estate used as collateral.
Borrowers cannot have filed for bankruptcy within the last three years.
Payment reserves are generally required.
Life insurance of up to 50% of the loan amount will generally be required.
Purchase commercial real estate, purchase machinery, equipment, fixtures and furniture, working
capital, inventory, refinance debt, cash-out debt refinance.
Loan Amount
Up to $4,000,000.
Time to Close
Commitment Letter within 3 days of completed application! Closing within
30 – 45 days of signed commitment letter.
Loan To Value
Up to 90%.
Interest Rate
Based on a spread over the 30 day LIBOR rate, adjusted monthly.
Term
Up to 25 years, fully amortizing over the life of the loan. No balloons.
Prepayment Penalty
No prepayments allowed the first year of the loan. Prepayments will be assessed a minimum penalty
of 5%, 4%, 3%, 2% and 1% of the loan balance in years two through six.
Fees
1 - 2% origination fee.
Good faith deposit to be used for loan closing costs.
Collateral
The loan must be fully secured by commercial real estate or a combination of commercial and
residential real estate.
Recourse
The loan must be guaranteed by at least one principal who owns 20% or more of the borrowing entity.
The guarantee of affiliated companies may be required based on the percentage of ownership of the
affiliate and the borrower's relationship with the affiliate.
Debt Service Requirements
A minimum debt service coverage ratio of 1.25 times is required.
Industries
Loans can be made to for-profit businesses except those involved in nuclear waste, utilities, natural
resource development, fishing vessels, biotechnology and internet technology.
Other Considerations
Appraisal and Environmental reports will be required for real estate used as collateral.
Borrowers cannot have filed for bankruptcy within the last three years.
Payment reserves are generally required.
Life insurance of up to 50% of the loan amount will generally be required.
| Conventional Commercial Loan ( Non - SBA Financing) |
Conventional financing is very popular with operators, dealers and jobbers due to general lower
origination cost and generally slightly lower interest rates than SBA or other government guaranteed
financing. Conventional financing however is typically more dificult to qualify for due to shorter
amortization periods and higher debt service coverage looked for by lenders.
origination cost and generally slightly lower interest rates than SBA or other government guaranteed
financing. Conventional financing however is typically more dificult to qualify for due to shorter
amortization periods and higher debt service coverage looked for by lenders.