A Florida resident who wants to borrow money for a commercial real estate project may believe that getting loan approval is a formality. However, the lender may not necessarily see it that way. If a person has tax issues, late payments or other credit blemishes, it may not be possible to approve a loan application. The only way to overcome these issues may be to have another person or entity guarantee the loan.
It may also be necessary for a borrower to have a high net worth or have a lot of liquid assets as collateral. Ideally, a lender wants to see that a commercial property has a history of generating revenue. Borrowers may believe that potential is all that matters when it comes time to ask for money to finance a new building or renovation project.
Lenders also want to see that a borrower has a track record of profitability when it comes to commercial real estate development. In most cases, a borrower will need a track record of at least three years in business with at least two years of profitability. To increase the odds of a borrower getting a commercial loan, it may be worthwhile to consider these objections ahead of time and have documentation ready to coax a lender to overlook them.
Individuals who are looking to buy an industrial property may want to talk to an attorney before making an offer or at any point before the deal closes. Legal counsel may be able to make sure that the title is clear and that other terms of the deal are in the buyer's interest. An attorney may also be able to work with tax or other government agencies to resolve issues related to back taxes or how the property is zoned.