Commercial Funding

I am trying to find out information on financing for a commercial property/business. We own an auto repair business, we have been on contract for the building and equipment for a year. Started the business in August 06. Due to trying to get the business up and running and keeping cash flow going our personal credit is in the toilet, if anyone has any ideas, please let me know. Thanks!! :bobble

It depends on poorly your credit score is and the financial stability of the auto repair shop. I doubt if your local bank will offer you a loan with poor credit (for small commercial loans, your local banks usually give you the best rate & terms). Your next option will be with a stated income loan, where the rates will be higher.


If it’s 580 or above we can help.

You’ll need to get more explicit with us on what you are trying to accomplish—there are both conventional and hard money commercial loans that will allow for a sub-600 FICO (and even one that doesn’t care about what your score is)…

Where is the property located? What is the final LTV you are seeking? What is the current gross monthly income/operating expenses for the business?

These are just few of the many questions that need to be answered before you can get any sound advice.


Scott Miller

Thanx for the help, the property is located in Linton IN. Credit is below 500, gross income approx. 18K per month, operating 9K, building/equipment payment is $1850 per month for last 12 months. Building probably appraise for $200K - $250K. I know it looks bleak, if any ideas, please let me know, also what about a co-signer? Thanks!!!

Yes you do have a few factors working against you:

  1. The low loan amount (you didn’t state what you’re buying it for but I’m assuming since the building appraises for $200K - $250K that you are paying less than that for it).

  2. Your credit score

  3. Property type - auto repair (lenders tend to look on these as “riskier”).

Here are my suggestions:

  1. Is the seller interested in holding a note? Offer him a short time period, say 2 - 3 years. That would give you enough time to repair your credit and obtain better financing.

  2. Can you find a business partner that has a higher credit score? It would have to be someone you trust and they would probably want a big portion of the business for the risk.

  3. You could also get a hard money loan, but the rates will be high and the LTV will be low. You don’t want a hard money loan if you wouldn’t be able to get out of the loan in a year.


Thanx for the reply. The seller has been carrying the note for a year, we’re trying to refinance. I’m unsure if we could find a business partner with good credit, but it’s worth a shot. The property is commercial, it just has an auto repair shop in it, I’m not sure if that makes a difference, it use to be a coca cola storage facility. 5000 sq ft, brick one story. Thanks for assistance!