What business owners should consider when purchasing, refinancing, renovating, or investing in commercial property.
Define the property and transaction
Commercial real estate financing begins with the property type, purchase or refinance purpose, occupancy, business plan, and requested structure. Owner-occupied properties, investment properties, construction projects, bridge transactions, and renovations may follow different underwriting paths.
Prepare the address, contract price or estimated value, requested amount, down payment, intended use, occupancy details, closing timeline, and renovation budget. For a refinance, explain the current debt, maturity, payment history, and reason for the new request.
How cash flow may be evaluated
For an income-producing property, providers may review rent rolls, leases, historical operating statements, occupancy, expenses, and debt-service coverage. For an owner-occupied property, both the operating business and property may be evaluated.
Use realistic assumptions for vacancy, repairs, taxes, insurance, utilities, management, and capital improvements. A property can appear profitable before these costs are fully included.
Tell CashMigo what the business needs, how much and how soon. We will review the request and help identify potential next steps.
Check My Funding Options →Loan-to-value and borrower contribution
Commercial real estate structures often consider the relationship between financing amount and property value or cost. The required equity contribution varies by program, property, borrower, and transaction risk.
Ask how value will be determined, whether renovation costs are included, when funds are disbursed, and what happens if the appraisal is lower than expected. Keep additional reserves available for closing costs and unforeseen property expenses.
Due diligence and third-party reports
Transactions may require appraisal, environmental review, title work, survey, insurance, property-condition information, zoning confirmation, leases, entity documents, and legal review. Construction or renovation projects may add plans, permits, contractor information, budgets, and draw procedures.
These items take time and can identify issues that change the transaction. Avoid setting an unrealistic closing expectation before required reports and approvals are complete.
Compare the full structure
Review rate, term, amortization, balloon payment, recourse, guarantees, reserves, prepayment provisions, covenants, fees, closing costs, and future funding obligations. A low initial rate may not compensate for a structure that creates refinancing risk or restricts the business unexpectedly.
Commercial real estate decisions are significant. CashMigo can help explore potential financing paths, but owners should also use qualified legal, tax, environmental, insurance, and real estate professionals.
Frequently asked questions
Can commercial financing cover renovations?
Potentially. The structure, disbursement process, budget, permits, and contractor requirements vary.
What is owner-occupied commercial real estate?
It generally refers to property used substantially by the borrower’s operating business, subject to program-specific rules.
Is an appraisal required?
Many transactions require an appraisal or other valuation, but exact requirements depend on the provider and transaction.
