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 America Trust Funding 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.

America Trust Funding

11820 Parklawn Dr, Ste 140
Rockville, Maryland 20852
Phone: 301-881-5555
Fax: 301-881-5575
Email: hsouza@americatrustfunding.com

CO Licensed # 100025695 under Department of Regulatory Agencies
VA Licensed # MC-4759 -
VA State Corporation Commission Bureau of Financial Institutions.
MD License # DLLR-14046
District of Columbia #MLB -5910 Department of Insurance and Securtiy Banking Bureau

NMLS ID # 1522 (www.nmlsconsumeraccess.org)