If you called every bank within 50 miles to find the best commercial loan for your property, you will find that just about every bank is going to quote you the same rates and terms:
- 3.97% to 4.81 fixed for the first five years
- 25 years amortized
- 10 years due
- Rate readjusted at the beginning of year 6
- Modest prepayment penalty of either 3-2-1 or 1 point.
Commercial bankers are herd animals. They enter and leave markets with the herd, and they all quote just about the same commercial loan. If you know what a community bank in Rochester, New York is quoting on a commercial loan, you pretty much know what a community bank in Hillsborough, California is quoting on a similar commercial loan.
It therefore seldom pays to spend hours and hours calling different banks in search of a lower rate. Banks are all going to be about the same.
Where banks will differ, however, is in the amortization and the loan amount. The typical amortization for a commercial loan is 25 years; but due in 10 years. Twenty-five years is to commercial loans what 30 years is to residential loans. It’s the typical amortization. Let’s suppose, however, that your commercial building is 45 years-old, and it is showing signs of deferred maintenance. Many banks will shorten their amortization schedule to just 20 years, thereby increasing your monthly payments and reducing the size of the loan for which you can qualify. In a case like this, it pays to shop for a different bank that will use a 25-year amortization.
Another reason to shop banks for the best commercial loan is the loan amount. Banks can vary significantly as to how much they will loan you. Some banks today are still stuck in a Great Recession mentality, and they will only loan up to 60% to 65% loan-to-value. Other, hungrier banks, will loan up to 70% to 72% LTV; but unfortunately few of them ever reach 75% LTV.
So in conclusion, we know right off the bat that –
- Almost every single one of the 6,799 banks in the United States are now making commercial loans.
- Most of these banks will consider both permanent loans and construction loans.
- The typical bank will consider almost all commercial property types, as long as the business owner is making good money.
- The rate is going to be between 3.87% and 4.91% for the first 5 years.
- The loan will have a 25-year amortization.
- The LTV will most likely be only 60% to 65%.
- The loan will have a term of 10 years, with a rate readjustment after 5 years.
- A modest prepayment penalty of 3-2-1 or 1 point is common.
- Therefore all you really need to know from your bank loan officer is his minimum loan, his maximum loan, and his lending area.
So, if you ever absolutely need a commercial loan with a higher loan-to-value, consider having us broker your commercial loan.
Because we broker all of our commercial loans through private investors, we cannot possibly compete with the banks on rates. Therefore our lenders have to compete on the basis of giving the borrower more loan proceeds. In other words, our lenders regularly win deals because they actually make loans up to 75% LTV. They might even consider a non-SBA commercial loan of 80% LTV on the right purchase-money deal. A purchase money loan is a mortgage loan used to purchase the property.
The PCFC Group is home of the 1 point broker fee – any type of loan – any type of property – only 1 point!
Even more good news…
The PCFC Group has spent the past five years building up its resources for commercial loans. As a result, we have over 750 private money investors who are hungry to fund commercial loans for us! We can find that loan for you! Call now so we can get to work for you today!
Commercial Loan Types
- Permanent first mortgage loans
- Bridge loans in a first mortgage position
- Land loans
- Sorry, no construction loans.
Minimum Loan: $100,000
Maximum Loan: $2,500,000 (will consider up to $3,500,000)
Acceptable Properties – All standing commercial properties, plus land loans, including:
- Multifamily (5 or more units)*
- Retail buildings
- Strip centers
- Shopping centers
- Industrial buildings
- Mixed use buildings
- Self storage
- Commercial condominiums
- Industrial condominiums
- Assisted living
- Residential care homes
- Day care facilities
- Nationwide (Crime rate of the neighborhood must not exceed 125% of the national average)
- If the property is less than 50 years old: 30 years
- If the property is older than 50 years: 25 to 15 years
Loan Term: 15 years
Points: 3 points typically – 1 point to the PCFC Group (Broker)
Prepayment Penalty: None
Application Fees / Upfront Fees: None
- Purchase money loans: 75%
- Refinances: 65% to 70%
- Land loans: 25% to 50% (usually 40%)
- 10.9% to 13.9% Nationwide
- 8.9% to 11.9% just in California
Appraisal Fee: approximately $2500
RDR Fee: approximately $250 (required for some properties that need an environmental report completed)
*SPECIAL NOTE regarding Apartment Buildings: We do have a bank rate program for APARTMENT loans. So on any multifamily deal, PCFC can get you a much lower rate with better terms.
Every one of the hard money commercial loans is individually-priced based on the risk, the desirability of the property, and the size of the loan (larger loans are more expensive).