Investment loans are utilized to finance commercial income producing property loans. Income Producing Property consists of real estate, which is either leased to tenants or partially owner-occupied. Primary underwriting criteria includes debt coverage ratio, loan-to-value and term/quality of leases.
Investment loans are typically used to fund the commercial real estate marketplace. Apartment complexes, office buildings and industrial sites can all be financed through the use of investment lending arrangements. The collateral typically consists of the property to be purchased; however, some higher risk investments may require additional security in order to obtain funding from traditional investment lenders. In order to ensure the most favorable response to the lending application, borrowers should consider the value of the property and its income-producing potential before making a decision to invest in these real estate ventures. For apartment buildings, check tenancy agreements and vacancy rates in order to ensure the viability of the investment. Similar due diligence is required for office buildings and industrial site space; ensuring that these real estate investments are operating at peak capacity is essential in order to maintain profitability in this area of the financial marketplace.
Along with the value of the collateral and the occupancy rate of the property, investment lenders typically look at the financial history of the borrower and his or her ability to repay the loan in a timely way. Small businesses with spotless credit histories have a much better chance to obtain funding in most cases. With the right collateral and presentation, however, even borrowers who have experienced credit difficulties can often qualify for investment loan financing through non-traditional lenders and alternative funding arrangements. CNF Exchange offers borrowers an exclusive venue for obtaining investment funding for real estate purchases. Business owners and administrators can upload their application for free through the CNF Investor Exchange interface for evaluation by lenders. Once the application has been considered, prospective borrowers can compare competing offers from a number of different investment loan companies to identify and obtain the most beneficial lending arrangement for their particular financial needs.