Underwritten on cash flow
Commercial lending starts with a simple question: does the property pay for itself? Lenders look at net operating income, which is rent and other income minus operating expenses such as taxes, insurance, maintenance and management. They compare it with the proposed loan payment, a measure called the debt service coverage ratio. A healthy ratio, together with a reasonable loan to value, is the foundation of approval.
Why use a broker for commercial financing
Commercial terms vary far more from lender to lender than residential loans do. Rates, amortization, prepayment terms, recourse and documentation requirements all differ. As a broker, we compare options across multiple lenders, including those that specialize in smaller Iowa properties that national banks tend to overlook.
If you own one to four unit rentals, see our investment property loans, which offer bridge and blanket options that qualify on rent.
Typical documents for a commercial loan
- Current rent roll and leases
- Two years of property operating statements
- Purchase contract or recent valuation
- Personal financial statement
- Entity documents for your LLC or company
- Business bank statements for business loans
