Blog – “In The Know”
Commercial Mortgages, Business
Loans and Stock Loan Financing:
What do Commercial Property
Investors, Business Owners and Stock Owners need to know before applying?
Hello, my name is Jimmy Wimbley, I
am a Commercial Mortgage Broker, I have been working in this space for several
years and have learned a few things about this industry and people in general –
I would like to share some of my insights with you.
For many commercial property
investors, business owners and stock owners securing the right financing is one
of the most important function that they are required to do – this can mean the
difference between running a successful business enterprise or Chapter 11 – for
those of you not familiar with Chapter 11 – that is a Business Bankruptcy – do
your research, take your time and get it right.
The first order of business is to
locate a broker, lender or investor who is willing and able to get your deal
done in the first place. I would like to give you some free advice at this
point – Do not, I repeat do not give anyone, anywhere money upfront for just
talking to you, talk is cheap and having a conversation is free – I am saying
do not be willing to pay for anything, those third party reports will have to
be paid for, such has appraisals, marketing reports, feasibility studies,
surveys, site inspection, environmental report phase one or two, engineering
examination fees, background checks, tri-merged credit reports, Bun and
Bradstreet Business credit report and attorney fees, most of these can be paid
at closing out of the loan proceeds, but there are certain vendors whom will
demand payment once the reports are finished or they will not release them to
the lender.
For commercial loans your loan
will be either a purchase or refinance, it will be either debt or equity. With
a purchase you will need to satisfy the lender’s down payment requirements,
which are 30% to 50% of the purchase price. With a refinance you will need
anywhere from 30% to 50% worth of equity in the property. Also, with refinance
you will need to show ownership for the past 12 to 24 months. With a purchase
you will need a signed purchase agreement in place with the current seller as
well. With equity you will be giving up anywhere between 50 to 80 percent
ownership of the project, this is when we bring in an equity investor, angel
investor, private investor, or a venture capitalist. The next step is to
produce a top tier Executive Summary and an Investment Grade Business Plan – an
example of both documents is on our website. If your deal is a simple CRE LOAN,
you still need a Commercial Loan Application, Business Loan Application or
Stock Loan Application, sending an Executive Summary along with these
applications is a plus as well.
Please keep in mind we are only at
the beginning of the process, once we submit your project or deal and a funder
decides your project is a fit they will ask for supporting documents, this can
be certified financial projections / forecasts, financial statements, credit reports –
personal and business taxes, most recent stock brokerage account statement, for a business loan – three months’ worth of
your business bank statements, income statement, corporate filings, core team
resumes / CV’s or Bio’s, Sources / Use of Funds, a signed purchase contract –
this list can get quite extensive – whatever documents the lender / investor is
asking for is solely to determine whether or not they will underwrite and close
your loan – if the underwriters do not get these docs in a timely manner they
will turn your loan request down. Please contact Wimberly Funding if you have a
project, business loan or stock loan you need to get funding for.
Thank You
Jimmy Wimbley
Wimberly Funding LLC
101 North Monroe Street
Tallahassee Fla 32301
