CRE Financing, or Commercial Real Estate Financing, are loans granted to prospective investors or owners who want to buy commercial property, such as office space or shopping malls. The loan amounts are larger than for private real estate loans and amortize over longer periods. Often, there is a large amount left at the end known as a “balloon” payment, and if it can’t be paid off, the owner usually refinances. It may be a challenge to get CRE financing if you are new to real estate investments or have a spotty credit history. However, even these are not insurmountable obstacles if you know how to proceed.

You should approach the bank with necessary documents showing your ability to pay off the loan and credit history. This includes tax returns and all income. It helps to approach a bank with whom you already have a positive relationship. If you have borrowed and paid back personal loans or mortgages with the bank, you may be a customer in good standing, and the specific bank may be more amenable to offering CRE Financing.

Make sure you have a plan for your property and can show the bank. A business plan detailing how the property will be used and how much rent you can expect to charge will give a clearer picture of the profitability of your project. Demonstrate why you feel there will be low vacancy rates and indicate that you will attract clients who are financially stable and can pay their rents. You may want to point to past successes in the same location. Also, show calculations of what you can expect to earn per month and per year.

If you have some spots on your personal credit history, […]