How Do Commercial Loans & Office Building Loans Differ From Personal Loans?

Commercial loans and office building loans are different from the more traditional personal mortgages in a number of ways. First and foremost it involves the financial history of the corporation or business. In other occasions, the individual shareholders may have to submit financial information as well, but this is generally only required of the signing guarantors. Secondly, regardless of the size of the property, the value of commercial real estate when compared to personal real estate is phenomenally higher. It is important to fully understand all of the aspects of the office building loans prior to signing any documentation, to avoid costly mistakes and other challenges.

What kind of information and documents will you need for your commercial loan:

1. Current Rent Roll:
– Square footage of units
– Lease abstract details such as: Escalations, commencement & expirations, add-ons, description of tenant, Description of any added rent that the tenant is responsible for (In addition three years of historical data would be ideal)

2. Detailed Income and Expense statements on the property:
– Annual property taxes
– Insurance
– Water/Sewer
– Fuel/Electricity
– Maintenance and Repairs. Proposed repairs and projects.
– Management/CAM
– Leasing commissions, tenant improvements

3. Detailed and complete description of ht property, including floor plan, most recent pictures and property survey.

4. The purpose of sale, if acquisition, you will need the copy of fully executed contract sale. If refinance, the original price paid, financing info, and the purchase date.

5. Management and Principal information and resume.

6. Personal Financial statements and current business financial statements.

7. Tax returns info for the past three years for personal and business returns.

8. Authorization to run credit report.