When considering purchasing a Dallas office lease and applying for a commercial mortgage, applicants should understand the many details that will be completed before a loan will be approved. Very different than a regular residential mortgage, commercial loans are a much greater risk to lenders which makes the property itself subject to much more scrutiny. Every possible step must be taken by a lender to ensure that such an investment in a business and building will be recovered, whether paid off by the borrower or sold if repossessed.
Requirements
Along with reviewing a business plan as well as getting a detailed company history and its projected future, lenders look at cash flow, assets, and more. A company should be prosperous in order to be a good risk for a commercial mortgage. So it is very unlikely that start-ups or very young enterprises will qualify for such types of mortgages. An established company stands a much greater chance of approval, although the chosen property must also pass its own checklist of requirements.
Qualifications
In determining whether property is suitable for its intended use and qualifies for a mortgage, lenders will look at its location relative to business and non-business areas, local zoning ordinances and even OSHA requirements to ensure of a legal and safe environment in which people can work. The last thing any bank or commercial lender wants to get involved financing property that actually violates some ordinance or zoning law as this would create liability issues for both the company and the financier.
Depending on what the problem is, applicants might be given an opportunity to resolve such issues or ask the seller to remedy the problem before any mortgage is written. More serious issues such as those involving building code, waste removal, or other conflicts are likely to be cause a loan to be denied.
Besides the physical details of a Dallas office lease, lenders will also closely examine any current or future growth being experienced by the business to decide if the property being sought offers enough room for projected expansion as well as to be sure that the building is not more than what than company can financially handle.
Lenders Know Best
Even though it may seem that an outside party is making decisions for a business they do not own, commercial lenders have experience in financing such properties and should be valued as part of the decision-making process. They have learned over time what factors can be detrimental to the survival of a business and whether a specific commercial property is a safe investment.
This could be a blessing in disguise. A smaller business is the least able to withstand any problems with a site or building requiring expensive repairs or a large fine by local inspectors. Not only could this potentially ruin a business, the bank may not be able to recoup the money owed. Foreclosures and liquidations of commercial property known to have problems can often be a loss for all involved parties.
Although it may seem that commercial mortgages are especially hard to obtain and lenders are exceptionally harsh when interpreting future property value, it is with good cause. Any business owner coming across a property that does not measure up to bank standards would be better off passing up that location and continuing to look for a more suitable commercial Dallas office lease. It is certainly true and beneficial to both buyer and lender that commercial property must measure up to get a loan!
LCRG (Laughlin Commercial Realty Group) Can Be Your Expert for a Dallas Office Lease!
Are you wondering whether you should purchase your Dallas office lease? LCRG (Laughlin Commercial Realty Group) at 214-526-2626 can help you decide whether this is a beneficial decision!