Applying for commercial real estate loans is exciting. The prospects in front of you are amazing: owning your own company headquarters and having the freedom to design the layout exactly how you want it. At the same time, you want to make sure your business is prepared for the financial requirements to qualify for the best loan. Even shaving a few percentage points off the loan’s interest rates can save you a lot of money in the long run, so it pays to be prepared. Here is everything you need to know about getting a commercial real estate loan.

What Documents Do You Need for Your Appointment?

It’s a good idea to prepare as many financial documents as possible to show that your business is in great financial health. You also want to demonstrate that you’re an excellent entrepreneur and that your company is in qualified hands. In a way, applying for commercial real estate loans is similar to pitching a group of investors for financing. As long as you can demonstrate that your business is a worthwhile investment, getting financing for real estate purchases is relatively straightforward.

A good rule of thumb is to prepare at least six months of your business’s main financial records, such as profit and loss forms, bank account statements, and tax returns. If your business has assets such as heavy machinery, it can help to show those records also. Your credit score plays an important role as well, but it doesn’t need to be perfect. In fact, depending on the type of real estate loan you choose, you may be able to minimize the impact of credit by relying on the property as collateral.

What Types of Commercial Real Estate Financing Exist?

There are three main types of commercial real estate loans. First, you can apply for a traditional bank loan for real estate. This type of loan is appropriate for building construction, office expansion, remodeling projects, and purchases of existing real estate. You can also use traditional loans to buy land in anticipation of future growth.

Another popular option is a small business loan. SBA loans have additional requirements, but they offer amazing interest rates for small businesses. In some cases, you can only use SBA financing for new construction or purchasing an existing building, not for land purchases.

Finally, bridge loans are a flexible option. They have higher interest rates but lower credit requirements, making them easy to qualify for. In addition, bridge loans get approved very quickly compared to SBA and traditional commercial real estate financing. This makes them attractive for taking advantage of good deals on real estate.