Expert: Brian Bocchieri - 5/15/2009

Question
brian, can you please answer a few questions....???
what is the difference between buss loans & comm'l loans? which is easier to obtain? which does NOT look at PERSONAL income? does either do 100% lending? trying to decide where to direct my energy... buss (laundromat) or comm'l(apt bldg or strip mall)
thanks for your time

Answer
Hello Darlene

Business loans are usually from your local bank.  The loan is based on your experience, credit,  and the type of business you starting or buying.  A commercial loan is mostly used for real estate transactions and is based on the cash flow of the property.  These types of loans are through commercial lenders which can be commercial banks, insurance companies, wall street brokerage houses, real estate investment trusts.  

Both loans look at personal credit but on the commercial side the property carries more of the burden.   You will still need experience in what you are trying to purchase unless you are purchasing a national NNN tenant.   By doing this they handle all the property taxes insurance and maintenance of the property.  Depending on the tenant and the lease term there is very limited 100% financing.    For any other type of transaction  forget the 100% financing most loans now are 75-85 LTV

I hope this helps clear things up for you

Wishing you all the best

Brian Bocchieri