Purchase, Refinance & Cash-Out
Our conventional lending options offer the most aggressive pricing in the industry. No matter the size of your financing request, our firm will support you throughout each phase of the transaction.
Whatever the loan request is, the way you present your story can make all the difference.
Program Terms
LFCP is a CRE consultancy with nationwide capital partners. We are not a Direct Lender or Bank.
Frequently Asked Questions
Conventional CRE loans can be used for purchasing new commercial properties, refinancing existing loans, or taking out equity from a commercial property.
Down Payment: Borrowers typically need to make a down payment, which can range from 20% to 40% of the property's purchase price, though this can vary based on the lender and the specifics of the deal.
Interest Rates: These can be fixed or variable. Fixed rates remain constant throughout the life of the loan, while variable or adjustable rates can change based on market conditions.
Amortization: Conventional CRE loans often have an amortization period of 20-30 years, even if the loan term is shorter. This results in lower monthly payments but might lead to a balloon payment at the end of the loan term.
Lenders will assess both the borrower's financial stability and the property's viability.
Debt Service Coverage Ratio (DSCR): A key metric in commercial lending. It measures the property's annual net operating income (NOI) relative to its annual debt service. Lenders typically look for a DSCR above 1.2, indicating the property generates sufficient income to cover loan payments.
Loan-to-Value (LTV) Ratio: The ratio of the loan amount to the appraised value of the property. A typical LTV for a conventional CRE loan might range from 65% to 80%.
Creditworthiness: The borrower's credit score, financial statements, and business history will be scrutinized.
Collateral: The property being financed typically serves as collateral for the loan. If the borrower defaults, the lender can take ownership of the property through foreclosure.
Beyond interest, borrowers might encounter various fees, including origination fees, appraisal fees, and potential prepayment penalties if they pay off the loan early.
Stability: With fixed-rate conventional loans, borrowers have predictable monthly payments.
Equity Building: Over time, borrowers build equity in the property as they repay the loan.
Balloon Payments: If the loan's term is shorter than its amortization period, borrowers need to be prepared for a large balloon payment at the end, or consider refinancing options.
Refinancing: Conditions at the end of the loan term might not be as favorable as when the loan was first taken out, posing a risk for those considering refinancing.
A conventional CRE loan is a foundational financial product for commercial real estate investors and businesses. While it offers stability and the chance to build equity, borrowers must be prepared for its requirements and potential end-of-term challenges. As always, consulting with financial professionals or lenders can provide clarity on the best loan product for a given situation.
Established 2012, we offer NATIONWIDE commercial real estate lending solutions.