How to Apply for a Commercial Real Estate Loan in Texas
September 29, 2022
With a proven track record of success, commercial real estate is a popular and thriving investment choice throughout the Texas Gulf Coast. For savvy business owners and investors, it’s easy to identify potential properties worth buying, so the real challenge is accessing real estate financing to help you achieve investment goals. We can help in that area.
Discover how to apply for a commercial real estate loan in Texas, which customers and industries are the best fit for a commercial loan, and why Texas Gulf Bank is the best choice for your real estate financing needs.
The Key Elements of a Commercial Real Estate Loan in Texas
Applying for a commercial real estate loan involves more than just filling out a simple application form. It requires a bit more time, documents, and evaluation to determine if your potential real estate transaction is a viable option.
Commercial real estate loans differ from residential real estate loans in several key ways, so it is important to understand those differences before you begin the application process.
- Shorter repayment windows, usually between 5 and 20 years.
- A larger down payment may be required.
- Possible prepayment penalties if the loan is paid off early.
- Required environmental site assessment (ESA).
Before applying, you should also confirm that your business entity is in good standing with the state of Texas legally and financially. Business loan applicants should not have any delinquencies or issues with sales tax, franchise tax, liens, or legal issues that would disqualify them from a commercial real estate loan.
In addition, you will need to confirm if your business plans to occupy the property being purchased (known as an Owner-Occupied), or if you plan to own it but lease/rent out the space to other business tenants (Non-Owner-Occupied). This determination will impact both the total funding available to borrow and also the down payment required as part of the loan.
To apply for a commercial real estate loan, you will need to submit documentation including but not limited to:
- Year to Date Business Balance Sheet & Income Statement on Borrower.
- 3 years of Fiscal Year End Business Balance Sheet and Income Statements.
- 3 years of Borrower and Guarantor(s) Tax Returns.
- 3 years of Borrower and any Guarantor (s) Financial Statements and Cash Flow Summaries.
- Intended use of the property (Owner-Occupied vs Non-Owner Occupied).
- Lease terms and tenant information for income-producing rental properties.
- Environmental site assessments.
- Overview of the company’s business model.
- Floor plans, building specs, budgets, and contractor information for construction projects.
- Financial projections (pro forma) of how the company will benefit from acquiring/developing the property.
- Legal documents of the entity that will own the property and will guarantee the loan.
- Required permits or business licenses.
Also be prepared to answer questions regarding the plans for the property immediately after purchase, as well as long-term goals and projections. For example, the bank will need to know how long you plan to own the property before construction begins, what type of building will be planned for the site, and what percentage of the property your business intends to occupy.
Businesses and Industries Benefiting Most from Real Estate Loans
Commercial real estate loans are an ideal lending solution for many businesses, but some owners and industries benefit more than others from this type of business loan. Contractors, small business owners, investors, and commercial builders and developers are the applicants who are most likely to benefit from commercial real estate lending.
Businesses and Industries most likely to need a commercial real estate loan include:
- Corporate offices
- Retail locations
- Restaurants
- Hotels
- Industrial buildings
- Commercial warehouses
- Healthcare facilities
- Mixed-use properties
We typically work with small-to-medium-sized businesses and investors who are looking to obtain a commercial real estate loan. The team at Texas Gulf Bank offers personalized service by assigning you a dedicated lender as the contact person who will handle all inquiries or requests throughout the loan process. Our approach ensures that you receive the best possible service that our customers come to expect from a local, community-based bank.
Texas Gulf Bank Is the Ideal Commercial Real Estate Lender
Why should a customer apply for a commercial real estate loan through Texas Gulf Bank? Simply put, our team of experienced lenders are committed to building strong relationships with customers, partnering with you to offer guidance and support towards reaching your commercial real estate investing goals.
As a full-service community bank with over 100 years of lending experience, we have an established track record of providing strategic lending options to businesses and industries across the Gulf Coast region. Texas Gulf Bank has a wealth of knowledge and experience in helping customers successfully buy and develop retail, industrial, mixed-use, and other types of commercial investment properties.
Through a commercial real estate loan, Texas business owners and developers can acquire the property or raw land needed to reach new heights of success. For more information, contact Texas Gulf Bank today to speak with a loan officer and apply for a commercial real estate loan. We are excited to partner with you and help you achieve long-term success.
All loans are subject to credit approval, and your company will need to meet loan-specific qualifications in order to qualify. Please have all of the documents and information required to apply prior to visiting with one of our bankers.