Non-Recourse
Commercial Financing
First, all Commercial Loans fall into one of
two categories, Recourse or Non-Recourse.
A quick definition because I know someone will
arrive on this page and may not be sure what the difference is
between Recourse and Non-Recourse Commercial Financing. So, let
me take this opportunity to offer a quick, and easy
explanation.
Non-Recourse Commercial
Financing means you do NOT have to
sign personally as a guarantor on the loan. Most Commercial
Loans are recourse Loans. ALL of your local Bank Loans
are Recourse Loans. ALL SBA loans are
Recourse Loans.
Recourse Loans DO require
you to sign personally as a guarantor on the loan. So, if your
business fails, guess who's on the hook? YOU.
Non-Recourse loans stand on their own, and do
not require you to sign as a personal guarantor, so you are not
tying up your personal assets. You eliminate the
personal risk with a Non-Recourse Loan.
And if that wasn't good enough,
Non-Recourse Loans are
Assumable. A Commercial Property with an
assumable loan is an easier Property to sell, when the time
comes of course. Imagine if, when you're ready to sell,
interest rates are 2% higher then what you are paying.
Do you think your Property with an assumable
loan is more attractive? You bet it is. Do you think getting
top dollar for your Property is going to be easier with that
lower assumable loan? You bet it is!
By now you're probably wondering what type of
properties can be financed using a Non-Recourse Loan, right?
Well, you can finance Apartment Complexes, Shopping
Centers/Strip Malls, Self-Storage Facilities, Mixed-Use
Property and Mobile Home Parks.
That covers a lot of ground. And it gives you a
lot of opportunity.
These properties can stand on their own because
they all cash flow. This is why certain Lenders (my Lenders)
will write Non-Recourse Loans. The bottom line is, if you are
considering investing in Commercial Real Estate, you should
consider these types of properties along with Non-Recourse
Financing.
Like all Commercial Financing, the terms will
depend on the overall strength of the deal. But, here are some
general guidelines for Non-Recourse Financing.
General Guidelines:
-
75% Loan To Value
-
1.25 Debt Service Coverage Ratio - The cash flow
from the property should be 1.25 times the amount
of the proposed new payment
-
Terms can go 20 or 30 years. A 30 year amortization
not only keeps your payment lower, but remember
with Commercial Real Estate it's all about the cash
flow. And with a 30 year amortization, you will
cash flow better than you will with a shorter term.
For more, specific information you will want to
take a look at the Non-Recourse Flyer.
Non-Recourse.pdf
Then pick up the telephone and call so we can
get started on your Non-Recourse Commercial Financing!
CALL 800-553-3442 NOW For Details
About Our Non-Recourse Financing
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