Conventional Commercial Loans

Added: (Mon Jan 30 2012)

Pressbox (Press Release) - Compared to an SBA loan, a conventional commercial loan today has less closing costs, higher rates, and lower leverage. Commercial loans require the borrower to have strong business financials and follow some very strict terms. Coupled with a higher interest rate the borrower must also pay certain closing costs, although with less lender fees than an SBA loan.

Commercial lenders don’t always allow for fees and closing costs to be financed in the loan.
• Loans fees, if financed includes points fee, application fee and credit report fees
• Prepaid interest, if financed
• Inspection fees, approximately $0.10 per sq. foot
• Appraisal, usually $3,000- $5,000 depending on the appraiser
• Environmental report
⁃ Environmental screen costs $500 – $1,500
⁃ Phase I Report costs $2,500-$3,000 ( required for most industrial property)
⁃ Phase II Report costs $4,000+
• Insurance
• Title Insurance, half paid by buyer, half by the seller
• Recording fees
• Documentary Stamps on the Notes
• Property taxes, shared with the seller

Typical closing costs for a buyer on the purchase of a commercial property using conventional financing are in the range of 2.5-3% of the purchase price.