Financing Commercial Buildings

by Roger Frost on May 1, 2012

If you’re interested in learning about smarter commercial property financing for small businesses, then you’ve come to the right place. Owning commercial property is one of the quickest ways for business owners to create wealth, and there are many financing options available. Many people earn a significant return on their Commercial property investments.

Banks as a rule do not lend based on collateral. Your apartment building, Commercial Warehouse, Rental House etc. has to cash flow. Credit History does matter. In the case referenced above, the Bank was willing to bend its credit policy by allowing a debt service ratio of 1:04X instead of the minimum 1:20X to please the seller, and convince him to bring his own $1,000,000 facility to the Bank.

There are many ways to finance your property purchase, be it from mortgage banking firms, savings and loan institutions, regional banks, insurance companies, and private investors. It is not advisable to pay 100 percent for your commercial real estate purchase. In the current economic climate, you can get up to 75 percent financing.

Typical bank requirements for financing Income Producing Properties (Shopping Strips, Apartment Buildings, and Commercial Warehouses) are commonly; Property must show sufficient debt repayment ability; banks will typically only finance 75% of appraised value; credit history of tenants or tenants and an environmental assessment if required.

Owner-occupiers refer to business owners who invest in a commercial property for their own use and also to get rental returns. Their goal is to be close to their suppliers and business partners. Corporate branding is also very important for them. Therefore, the location and the type of building play an important role when selecting a commercial property. Owner-occupiers usually assign an architect to plan their buildings from scratch or buy direct from a developer.

Commercial Building Inspections are performed by in Southern Ontario Region. Inspections are performed in accordance with ASTM E2018-99. The PCA has been divided into four steps: Perform document review (drawings, maintenance records, etc.). Perform a walkthrough survey of the property. Prepare costs for remedies recommended. Document findings and costs in a written report. Few properties are in perfect condition. Like used cars, older properties require maintenance and repair over time. An inspection can clue you in to areas of concern, improve your negotiating position and provide you with an assessment of the current condition of the property for future reference.

Locate the Toronto Commercial Property Inspector for all your Ontario investments. Try the Commercial Building Inspector Services and protect your financial future.

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