Tips to get industrial property loan effortlessly
With the number of times we get phone calls from banks asking us if we want a loan, getting a loan sounds like a piece of cake. It must be, especially since so many banks and investors are readily offering loans. In reality it’s not. You might actually find an easier way out if you are planning to buy a residential property, but getting a loan for industrial property seems like a herculean task. Most companies are very skeptical about giving away industrial loans.
For buy a commercial property, there are two things that people usually do with it, set up and run a business or just rent it out. Finance organizations are more comfortable lending money to someone who actually plans to start up a business on the property. Therefore although this may be a difficult task, it’s not impossible and here are a few ways you can make it easy.
- Have a plan
Make sure you are aware of exactly what you will require the money for and how do you plan to use it. How will acquiring that property affect your business and the income generated from it? Make sure you have a crystal clear plan and don’t forget to discuss it with your lenders. It acts as an assurance that you will successfully repay the loan, or that you at least have a plan that leads to it.
Make sure you know the value of the property, quoting a price much higher is a sign of unprofessionalism. In case the property is still under construction, lenders may not be completely convinced about giving you a loan. In case you still want to, then figure out a way to establish credibility of the builder.
When you are being loaned money for commercial purposes, the organization would like to know about your other business ventures or assets and if you have any other loans pending, or your financial records related to your business, your tax returns, bank statements etc. Make sure you have everything in place and available at your fingertips. It is also a sign of being prepared and focused on your goal.
- Decide how to pay back
When negotiating how you will repay the loan, and how much will you pay and by when. Take the first step. Your lender will always quote higher and negotiating can become difficult. Be honest about this and have a realistic plan.
- Do your homework
Compare property assets in the surrounding and know about your own property and similar properties in the area. It shows that you have checked and made an informed decision regarding your property. Lenders often appreciate such preparedness and expertise in their borrower.
To avoid unnecessary hassles make sure you borrow money from a reliable source. The lenders provide only around 50%-55% of the value, so make sure you have a way to manage the other half of the total expense.