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A few things I wish I'd known before financing commercial property in Texas
Sharing this for anyone starting to look at commercial loans in Texas, because I got a few things wrong early on.
First: it's not like a home mortgage. Lenders care way more about whether the property (or business) can pay for itself than about your personal credit. Bring cash flow, rent rolls, and a clear plan — not just a good FICO.
Second: don't shop on rate alone. A "cheap" rate with a short balloon or a stiff prepay penalty can cost you way more than a slightly higher rate with flexible terms. Compare the whole structure.
Third: run the numbers before you fall for a building. Stress-test the payment against realistic income — what happens if a tenant leaves for six months?
And match the loan to the goal: real estate loan vs. business loan vs. construction (staged draws) vs. hard money if you need speed. They're not interchangeable.
Curious what others here have run into — did you go bank, SBA, or private? And what down payment % are you seeing lately?
First: it's not like a home mortgage. Lenders care way more about whether the property (or business) can pay for itself than about your personal credit. Bring cash flow, rent rolls, and a clear plan — not just a good FICO.
Second: don't shop on rate alone. A "cheap" rate with a short balloon or a stiff prepay penalty can cost you way more than a slightly higher rate with flexible terms. Compare the whole structure.
Third: run the numbers before you fall for a building. Stress-test the payment against realistic income — what happens if a tenant leaves for six months?
And match the loan to the goal: real estate loan vs. business loan vs. construction (staged draws) vs. hard money if you need speed. They're not interchangeable.
Curious what others here have run into — did you go bank, SBA, or private? And what down payment % are you seeing lately?
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