How Do Commercial Loans Work?

A commercial loan differs from a residential mortgage in that the collateral used to secure a commercial loan is a commercial building or business real estate instead of a residential property. What’s more is commercial mortgages are generally assumed by a business entity instead of an individual borrower. As a result of this, assessing and securing a commercial mortgage is somewhat more complicated than a residential mortgage. A complex process involving many factors plays into determining creditworthiness for a business.

At PRIME 1 BANCORP, LTD it’s our privilege to guide you through this new and exciting process. Two of the most important aspects of a commercial mortgage to keep in mind are interest rate and loan repayment schedule.

 

Interest Rate

Most commercial loans offered today are fixed. This means you have the security of knowing that if interest rates were to increase you wouldn’t be stuck making higher monthly payments. Conversely some borrowers are opting for a variable interest rate to take advantage of lower initial payments. However, a loan of this nature runs the risk of having interest rates increase and thus increasing your monthly payment.

Loan Repayment Schedule

Unlike residential mortgage loans, most commercial loans require a balloon payment at some point during the loan term. This means that after a given amount of time making small monthly repayments, the borrower would be required to make a large final payment consisting of the remainder of the loan. Loan Repayment Schedules which call for a longer time to repay the loan typically have higher interest rates.

Please speak with one of our representatives today to take advantage of this terrific opportunity to grow your business. We’ll guide you every step of the way and customize a commercial mortgage solution specific for your business.

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Required Documents

VA Loans

Veteran Loans

Disclaimer:
Prime 1 Bancorp, Ltd is not affiliated with any government organization or bank nor do we act on behalf of the FHA or VA. We are not a Federally chartered or State Chartered Bank. We are an we are an Illinois Residential Mortgage Licensee by the Office of Banks and Real Estate License #MB.6761138, a Colorado Registered Mortgage Brokerage by Division of Real Estate, a Florida Residential Mortgage Brokerage Licensed by the Office of Financial Regulation License #MBR1930 dba Prime 1 Bancorp Ltd, Inc, a California CFL Licensed Mortgage Brokerage by Department of Business Oversights 60DB055973 and an Alaska Licensed Mortgage Brokerage by the Division of Banking and Securities AK1434638-1 dba Prime 1 Mortgage . Prime 1 Bancorp, LTD Corporate Office is located at 2720 S. River Rd Suite 50, Des Plaines, IL 60018 our Toll Free Number is 888-205-3737.

Loan product availability is subject to qualification of the borrower and loan approval after full review of the file. Not every applicant qualifies or is eligible for every loan program. Some loan products may not be available in all states. Loan approval, note rate and annual percentage rate are dependent on factors including, but not limited to, credit, collateral, income, assets and overall financial history. Not all applicants will be approved for a loan. All loan programs, terms and annual interest rates are subject to change without notice. NMLS: 1434638