If your business is ready to take the plunge and invest in its own commercial real estate, the biggest hurdle is often finding the funding. Lenders require very detailed documentation and projections for commercial mortgages. Before you hand in your application, here are a few items to check off your list:
Have you collected all the pertinent documents?
Whether or not your bank requires all of these records, it would be smart to have things like insurance quotes for the commercial property and the most current tax bill from the seller or tax collector. You should have a Year-to-Date Profit & Loss Financial Statement ready to show the lender what has been happening with your business and how it is likely to do in the future. If applicable, you will also want to prepare gift letters if someone is giving your equity for the new property, and if there are any environmental issues you will need to prepare any relevant paperwork for the application.
Have You Spell-Checked Your Application?
Once you have all the proper documentation, look over your actual application again. Nothing is more unprofessional than typos and grammatical errors. Remove abbreviations to reduce confusion and make sure your application is clear and concise. You may even want to ask a friend or relative to proofread it to give you a fresh perspective.
Is There Anything Else You Can Add to Persuade the Lender?
If there are any special circumstances that need to be explained, like a valid reason for a blemish on your credit, attach a letter of explanation. You might also want to attach some professionally-taken color photographs of the commercial property. Beautiful images of the real estate could help form a positive first impression for the lenders.
Your credit score and actual financial data will be the biggest deciding factors in receiving a commercial mortgage, but making sure your application is clean and filled with helpful documents will certainly have a positive impression on lenders as well.