There are a few things to consider when shopping for a commercial business loan. These loans are structured differently and there is usually a minimum loan amount. There are other differences as well that are not immediately obvious.
Having good credit is a very important part of securing a building loan in the first place; there is not much difference between each type of loan when it comes to having to have the credit in place. The difference is that when you are trying to secure a commercial building loan there may be several different credits that are being looked at. A residential building loan usually only depends on the future owners credit.
Trying to secure a building loan for a commercial project will depend on a few factors. Typically the credit score of the business will be considered, this information is usually kept by Dunn and Bradstreet or Standard and Poor each of these entities rate credit worthiness of a business they use a special formula to determine the amount of risk that is involved with a business. Some of the key elements that they consider are on time payments to creditors, holdings and number of employees.
The bank or the financial institution takes the report from these companies into consideration; they also look at the officers of the corporation’s credit worthiness as well. The smaller the company the harder they look at the officers of the company.
Credit matters because the financial institution usually will have quite a large stake in a commercial project where they stand to lose a good bit of money if the company should go belly up.