Applying for loans to get your small business up and running can be time consuming and confusing, but it is necessary for success. But after getting all the necessary paperwork in order, one other factor to take into account is timing. When you apply for a commercial real estate loan can determine if you get the lowest interest rate you desire. Here are a few key points to keep in mind:
1. Beginning of the month – Start the loan application process within the first few days of the month. Lenders will be more relaxed and eager for developing new business networks with entrepreneurs after their previous cycle has ended. The turn of every month means a fresh start for lenders to improve upon their last month’s performance. They will have more patience and time to hash out a suitable deal than in the end of the month.
2. Away from large purchases or changes – Credit score is key to securing a worthy commercial real estate loan. Thus, make sure to avoid applying for loans near any expensive purchases or closing of accounts. Any accidental drops to your credit or big changes in spending will be a red flag for lenders. Furthermore, try to avoid letting anybody pull your credit score as lender can see this and lead to you answering unnecessary questions.
3. After Opening a Down Payment Fund – Odds are likely that this commercial real estate loan will require a large sum of capital. Keep this money set aside in a separate account to streamline the application process. Make sure this account has been open for at least 60 days before you walk through the lender’s door. Another benefit from a maintaining a separate account is to avoid transactions showing up because a lender typically requires the last two months of account statements.
Follow these steps to determine the best time to enter the market for a commercial real estate loan. Contact Biz2Credit if you need further advice for your situation.