Mortgage Financing

Mortgage financing allows business owners to access capital by using commercial real estate as collateral. This type of financing can be used to acquire new property, expand into additional locations, make capital improvements, or unlock equity from an existing property to support business growth.

How Mortgage Financing Works

• Financing can be secured by placing a lien on a property you already own, with proceeds available for approved business purposes.

• Financing can also be structured by placing a lien on a property you are in the process of purchasing, with funds used toward the acquisition.

• The property itself serves as collateral, which helps support longer terms and more competitive rates.

What Determines Rates and Terms

Loan pricing and structure are influenced by:

• The loan’s term length and overall risk profile

• The loan-to-value (LTV) ratio

• Your personal and/or business credit profile

Questions to Consider

Before pursuing mortgage financing, ask yourself:

• Do you currently own any commercial or income-producing property?

• Are you planning to purchase commercial real estate?

• Does the property generate rental or operating income?

• Is there existing debt secured by the property?

• How many units are included in the property?

Documentation Typically Required

Lenders generally request:

• Profit and loss statements

• Property details, such as an appraisal or broker’s opinion of value (BOV)

• The most recent three years of tax returns

• Personal financial statements dated within the last 60 days

Helpful Things to Know

• Mortgage financing is available only for income-producing properties.

• Rental income from tenants is the most common way a property qualifies as income-producing.

• Properties that include both an operating business and rental units are commonly referred to as mixed-use properties.