Navigating Commercial Building Loan Landscape for Small Business
One of the essential components of business growth and sustainability is securing necessary financial resources. For many, this means turning to commercial loans. We checked in with Steve Canole, Senior Vice President of 1st State Bank, to find out the current commercial financing climate and if there are any changes, insight, or guidance our business owner clients should know to secure financing to fuel their growth.
“For owner-occupied buildings, banks seem to be still willing to finance in the 80% range, this can fluctuate depending on other credit variables,” Steve explained. So, this is good for business owners that occupy 51% or more of their buildings. Investment real estate financing is proving to be more questionable, varying by each lending institution. “Over the last 18 months, lending is back to financing 75% or lower. Some financial institutions are pulling back all together on considering investment real estate financing.” The message here is to keep inquiring with different lenders until you find one that will work with you.
Cashflow and equity are still the primary factors a lender evaluates. Steve shared that start-ups or businesses with large expansions will be scrutinized more in the current climate.
Things a business owner can do to make financing easier:
Securing a commercial building construction loan offers a wealth of opportunities for business owners. With careful planning, a clear understanding of the current lending landscape, and a well-prepared loan application, you can access the capital needed to drive your building project forward. It’s a dynamic environment, so staying informed and being adaptable will be essential for business owners seeking financial support in the ever-evolving world of commerce.