The Value of Customization for Small Commercial Properties

By: Zack North

Small business owners, investors of small commercial properties, and other types of entrepreneurs and self-employed professionals all have one thing in common: they see customization as a way of life.

Think about it – while others seek stability and structure in their careers, these men and women choose to make their own way.  They set their own schedule, create their own business plan, and even design their own company logo.

When it comes time to either purchase a small commercial property or refinance an existing mortgage, these business owners and investors seek the level of freedom they’ve worked hard to secure in other areas of their professional lives.

And that’s the problem.  The current process for obtaining a commercial mortgage just doesn’t leave much room for customization.  As a result, borrowers who crave control are left with cookie-cutter mortgage solutions.

But it doesn’t have to be that way for commercial mortgage borrowers any longer.  Thanks to Commercial Direct, a division of Silver Hill Funding, LLC, small business owners and investors can get a commercial mortgage on their own terms.  By giving borrowers the ability to customize many different aspects of their loan, Commercial Direct makes it possible for them to design the exact loan to fit their needs.

Why does customization matter?

If you’re new to commercial mortgage lending, you may be wondering why custom terms are so valuable for borrowers.  The truth is that commercial mortgages need to be unique because every commercial property is unique.  While two houses in the same neighborhood will likely share many characteristics, two commercial properties in the same office park may have nothing at all in common.  The differences only grow in number when you start comparing different commercial property types, such as warehouse and small apartment buildings.

Of course commercial mortgage borrowers are unique as well.  Whether it’s due to the nature of their business or a financial difficulty they endured in the past, many credit-worthy borrowers require some documentation-related flexibility when looking for the ideal funding solution.

For other borrowers, the difficulty lies in finding terms that meet their exact needs.  For instance, a business owner looking to purchase her commercial mortgage may struggle to find a lender that offers options for the prepayment penalty.  If the borrower is unsure how long they want to own the property, this aspect of the loan structure becomes a major focus.

Customization is also important when considering interest rates and monthly payments.  If a borrower is enjoying healthy cash flow at the time of the transaction, they may wish to use of that cash to buy down their monthly rate.  Conversely, borrowers who are going through a rough patch may be looking for the opportunity to minimize monthly payments for as long as possible.

The point is that borrowers need options.  As you consider your business objectives and reasons for obtaining a loan, just think about all the aspects you’d like to control to ensure success down the road.

This is why the one-size-fits-all approach of traditional commercial lenders simply doesn’t work for so many business owners and investors these days.  And it’s why Commercial Direct is dedicated to giving you more options.

What can you customize with Commercial Direct?

When you design your loan with Commercial Direct, you can customize the following aspects:

  • Fixed Rate Period: The number of years your rate will stay the same (2 – 10 years)
  • Loan Term: The total number of years your loan will remain outstanding (15 – 30 years)
  • Prepayment Fee Option: Commercial Direct charges a 5% prepay fee on all loans. You can lower your monthly interest rate by selecting a longer term (2 – 5 years)
  • Interest Only Period: The period during which you only make interest payments (0 – 24 months)
  • Payment Day: The day you wish to make your monthly payments (1 – 28)
  • Rate Buydown: The amount you wish to pay upfront at closing (0 – 2%)

 

You can also choose how much documentation you wish to provide:

  • Platinum Program: This option works for those who want the lowest rates and highest possible loan amounts. Full documentation is required, including personal/business tax returns, property operating receipts, and other supporting information.
  • Silver Program: This option is designed for those who prefer not to submit tax returns, but can provide property operating information and other supporting documentation.

This level of customization allows you to take control of funding request and design a solution that meets your specific needs.  If you’re a small business owner or real estate investor, chances are you wouldn’t want it any other way.

To see first-hand how Commercial Direct can help you get a commercial mortgage on your own terms, visit our Loan Customizer now and see which program and options work best for your business.

Author: Zack North

Zack North is the Director of Marketing for Commercial Direct.  As a regular contributor to a number of top industry publications, Zack enjoys writing about topics that help investors and business owners approach commercial mortgage financing with confidence.

Fees to Expect When Financing Your Commercial Loan

Don’t let lender fees catch you off guard – here are all the fees you can expect from submission to closing.

3 Benefits of Working with a Direct Lender

Faster closings and more flexibility are just a couple ways partnering with a direct lender can be beneficial for your next commercial loan.

3 Commercial Loan Underwriting Basics You Should Know

LTV? DSCR? NOI? We break down a few underwriting terms to help you better understand the commercial mortgage transaction process.