PROVE ME WRONG: Commercial loans are easier to get than residential loans.
This comes up all the time when I’m working with newer investors or investors who haven’t branched into the commercial lending space yet. Here’s my claim to them: Commercial loans are so much easier to get than residential loans.
“But Jessica, it’s commercial!”
“Yeah, exactly!”
Commercial lenders care more about the property than they care about you. My husband and I have been purchasing commercial properties for years, and I couldn’t tell you what my credit score is, and I couldn’t tell you the last time a lender asked either!
Commercial lenders care about you insofar as:
What’s your personal financial statement look like, and…
Do you have a history of paying your debts?
That’s about it!
They mostly care about the property:
How is it currently performing?
What’s the DSCR (Debt Service Coverage Ratio) at purchase?
Is there upside?
What’s the area like?
Basically, the PROPERTY is getting the loan, and you, the borrower, are simply the steward of that property.