| Guidelines are different for
commercial loans than consumer loans and residential loans.
Each loan is evaluated on case by case basis that will look
at the 4 C's of Credit: 1.
Cash Flow. Each lender will review the historical cash
flows generated by the borrower for the past two years and
its current year to date information. This is the
bank's primary source of repayment.
2. Character. Character looks
at the borrower and the guarantor's willingness to support
the debt in the event their assistance is needed to either
payoff the loan, add additional collateral or restructure
the loan.
3. Capital. The lender will
want to know how much equity is put into each loan so that
it minimizes its risk and is a good way for the bank to
understand how much skin in the game the borrower has put
in.
4. Collateral. The value of
the collateral that is used to support the secondary source
of repayment is typically used when the loan in default and
liquidation. Collateral is usually cash, stocks,
bonds, mutual funds, various forms of real estate, accounts
receivable, inventory, equipment, vehicles and other types
of hard assets. Some lenders may allow other
collateral on a case by case basis.
Loan To Value(LTV):
Owner Occupied Real Estate: 80%
Investment Real Estate: 75% (Some lenders
may look for 65-70% depending on the asset class)
Accounts Receivable: 75% (subject to
various covenants on aging and specific receivables)
Monthly Payment Commercial Loan Calculator
Use this calculator to perform calculations for payments
based upon an amortization schedule.
Interest
Only Commercial Loan Calculator
If you have an Interest Only Commercial Loan Payment, use
this calculator for calculating your monthly payments
without paying principal.
Commercial Loan Calculator - Debt Service Coverage
If you are looking to refinance a commercial loan or obtain
new commercial loan financing, this calculator will help you
estimate your debt service ratio to determine whether you
have enough cash flow for someone to give you a loan.
Commercial Loan Guidelines
What are the guidelines for commercial loans? Here are
common underwriting guidelines including loan to value (LTV)
ratios
Commercial Loan Covenants
Find out what some of the common loan covenants for
commercial lending in today's lending environment.
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