Unlocking Opportunities with Small Balance Commercial Loans

Small balance commercial loans are a game-changer for small business owners who need a financial boost. These loans offer flexible terms and lower interest rates compared to traditional commercial loans, making them an attractive option for many entrepreneurs.

With a minimum loan amount of $250,000, small balance commercial loans provide access to capital for businesses that may not qualify for larger loans. This can be a huge relief for small business owners who need to cover unexpected expenses or take advantage of new opportunities.

By unlocking opportunities with small balance commercial loans, business owners can focus on what matters most: growing their business and achieving their goals.

If you're looking for a small balance commercial loan, you'll need to understand the eligibility requirements. Retail properties are eligible, including storefronts for selling goods or services.

To be eligible, your loan amount must be at least $250,000. This applies to various loan purposes, such as purchasing, refinancing, or bridging to stabilization or sale.

Office properties are also eligible, generating income from tenants comprised of businesses and professionals.

Eligible loan purposes for office properties include purchase, refinance, bridge to stabilization, bridge to sale, or bridge to construction take out.

The loan process for small balance commercial loans is relatively straightforward. You'll typically need to provide financial statements, tax returns, and other documentation to demonstrate your business's creditworthiness.

These documents will help lenders assess the risk of lending to your business. In most cases, you'll need to provide at least two years of financial statements, including balance sheets, income statements, and cash flow statements.

A lender will review these documents to determine your business's creditworthiness and decide whether to approve your loan. They'll also use this information to determine the interest rate and repayment terms of the loan.

Small balance commercial loans typically require a personal credit score of at least 660.

Business credit scores, on the other hand, can range from zero to 100, and most small business commercial loans require a minimum business credit score of 75.

Securing small balance loans can be a daunting and frustrating process, especially for startups or those with limited credit history.

As you navigate the loan process, you'll need to gather and provide various property documents. A Purchase Contract is typically required, outlining the terms of the sale.

This document serves as a binding agreement between the buyer and seller. It's essential to have a clear and comprehensive contract in place.

A Payoff Statement may be necessary if you're refinancing, showing the outstanding balance on your existing loan. This information is crucial for the lender to determine the amount you'll need to borrow.

Renovation Budgets are also important if you're planning to rehab a property. This budget outlines the estimated costs of any repairs or renovations.

Here are the typical property documents required:

Small balance commercial loans offer several benefits that can make them an attractive option for investors. No income documentation is required, making the process faster and less complicated.

One of the key requirements is a minimum credit score of 650. This ensures that borrowers have a good credit history and can manage their debt.

The loan closing process is relatively quick, taking between 10-17 days. This allows borrowers to access funds quickly and make the most of investment opportunities.

Rates start at 6.35%, which is a competitive rate in the market. This means that borrowers can secure a good interest rate and keep their costs low.

Here's a summary of the benefits and options available:

When considering a loan, the benefits can be a game-changer for many business owners. One of the most significant advantages is the speed of closing, which can happen in as little as 10-17 days.

A quick closing can be a huge relief for businesses that need access to funds quickly. This is especially true for those that require cash to take advantage of new opportunities or cover unexpected expenses.

To qualify for these types of loans, a minimum credit score of 650 is typically required. This can be a challenge for some business owners, but it's worth noting that a good credit score can also help qualify you for better loan terms.

The rates for these loans start at 6.35%, which is competitive with other loan options. However, it's essential to weigh this against other factors, such as the loan's terms and conditions.

Here are some key benefits of these loans at a glance:

Loans for Big Picture are available for multifamily investments. Berkadia offers Fannie Mae Small Loans and Freddie Mac Optigo Small Balance Loans.

These loans can be used for investments up to $9 million. This is a significant amount that can cover a wide range of multifamily projects.

Berkadia's team of dedicated professionals has intimate knowledge of Fannie Mae and Freddie Mac loan programs. This expertise allows them to provide seamless processes and customized solutions for their clients.

With access to Berkadia's market data, clients can get the best rates, terms, and leverage for their investments. This empowers them to make informed investment decisions.

You'll be taxed 20% of your gains after selling a commercial property, which is a significant consideration for investors.

This tax rate applies to capital gains tax on commercial property, and it's essential to factor this into your investment strategy.

Selling a commercial property can result in a substantial tax bill, so it's crucial to understand the tax implications upfront.

Retail properties are eligible for small balance commercial loans, and can be used for commercial retail space such as a storefront for selling goods or services.

Office properties are also eligible, generating income from tenants comprised of businesses and professionals.

A five-unit apartment building is a good example of a smaller CRE project that can benefit from a small balance loan, requiring a smaller loan amount compared to a larger-scale project.

Here are some eligible property types for small balance commercial loans:

Selling a commercial property can lead to a 20% tax on your gains, which is a significant consideration for investors.

You'll need to factor in the capital gains tax when deciding whether to sell a property, as it can eat into your profits.

The tax rate on capital gains from commercial property sales is typically 20% of the gains.