Industrial Building Loans

Owners evaluating industrial building loans have solid financing options. Though this is a broad category and finance programs very widely based on such factors as loan amount, owner occupied or investment, single tenant or multi tenant, etc.  In addition, eenvironmental concerns can be a major factor and often slow lenders as the liability for contamination is high within the industrial building loan sector. 

LTV

Loan to values are often restricted at 75% on industrial property refinances and are normally capped at 70% loan to value on cash out refinances.  Higher LTV’s are available, but come at an increased price for the borrower.  Lower loan to value requirements should be expected for industrial investment properties, normally reduced by 5% off the above.  

Purchase transaction can go up to 90% financing for owner occupants via both SBA and Non SBA loan programs.  In addition, many lenders are willing to allow secondary and or seller financing to help structure deal with a combined loan to value of 90% as the normal cap.  

DSCR

Debt Service Coverage Ratio restrictions are typically set at 1:1.2 for both investors and owner occupied industrial properties.  Meaning that for every $1.20 of net income (income after taxes, insurance, repairs etc) the property/business produces, the mortgage payment will not exceed $1.00.  Said in another way, after all expenses and the mortgage has been paid, the owner needs to net $.20 to qualify.

Some exceptions can be made with this rule on industrial refinances.  For example, stated income loans can be an outstanding option for owners that have low debt coverage ratios due to either overstated expenses, current high levels of vacancy, or understated income.

Tenant Evaluation

Tenant evaluation is not as important within the industrial properties as others (like single tenant NNN properties) but still important. Lenders scrutinize the time left on the current lease(s) and other relevant information.  Of particular concern on industrial property refinances is the time remaining on the current lease(s).  For example on multiple unit properties, lenders prefer the lease expirations to be staggered and most banks/ lenders want to see at least 3 years left on the current leases.  Some traditional banks will not allow the fixed period of the loan to exceed the time left on the lease.

Property Analysis

Market value and market rent is very important and will be evaluated and compared to the subject property.  Environmental condition of the property will be heavily scrutinized.  Phase 1 reports will be required.  Age, appearance, location, accessibility, and local market conditions, as well as other factors are considered. 

Credit Worthiness

The personal credit worthiness of the borrower will be considered.  680 credit score is normally the minimum for the best finance options.  Exceptions can be made on this as well with some conventional lenders considering scores as low as 600 within this category.  The overall strength of the property, tenants, DSCR, and LTV can offset concerns on low credit scores. For corporations, business performance and credit rating will be evaluated.

We have some of the best industrial loan options in the market today.  For example we have a 30 year fixed program and a no cost (excluding environmental insurance) industrial refinance program for loans under $500,000.

Get pre approved now for your industrial building loan or call 248 885-8797 to discuss.

STORE For Commercial Loan Brokers! Commercial Loan Training

---

:: Commercial Loan Programs :: Fixed Rate SBA 7a Loan :: Commercial Second Mortgages :: Commercial Equity Line of Credit :: SBA 504 Commercial Loans :: Hard Money Commercial Loans :: Commercial Stated Income Loans :: Commercial Loan Rates :: Commercial Loan Calculators :: 90% Commercial Financing :: Commercial 30 Year Fixed :: Commercial 15 Year Fixed :: PRE APPROVAL :: Commercial Loan Refinance :: Hotel Loan :: Restaurant Funding :: Office Building Loans :: Mixed Use Property Loans :: Industrial Building Loans :: Retail Property Loan :: NNN Property Loans :: Automotive Property Loans :: Car Wash Loans :: Gas Station Loans :: Special Purpose Property Loans :: STORE for Commercial Loan Broker :: Commercial Mortgage Broker Fee Agreement :: Co Broker Agreement :: Commercial Mortgage Broker Training Book :: Spreadsheet Commercial Loan :: Commercial Loan Training Course :: Become Commercial Broker :: Commercial Loan Underwriting :: Commercial Lease vs Own :: Commercial Loan News :: Commercial Property List :: FAQ's :: Site Map :: Links ::

 

Commercial Finance Advisors, Inc.
(248) 885-8797 Phone
(866) 337-3141 Fax
http://www.cfa-commercial.com/
261 E Maple Rd
Suite 13
Birmingham, Michigan 48009

 

© 2008 Myers Internet, Inc. All Rights Reserved

Powered by: Myers Internet, Inc. | Admin Login