The Importance of Having Good Credit to Get Finance For a Commercial Property
The importance of having good credit to get finance for a commercial property
The commercial real estate market has been experiencing challenges over the last few years due to the lack of financing. However, it’s on the way back! There are many commercial property loans available, but commercial financing is not as easy to get as many people think … unless you have good credit. In the article below we cover the importance of having good credit to get finance for commercial properties and steps you can take to help your credit score that isn’t up to scratch.
Why is having good personal or business credit (usually both) so important when you want to invest in a commercial property?
- Commercial real estate loans usually require the borrower to have a history of successful credit–personal and business. This means you must be able to verify your creditworthiness and stability.
- Commercial banks also need to make sure that their capital is being invested in good properties that will increase in value and not be wasted on borrowers who don’t care about paying off their loans.
- Commercial property owners with lower credit scores may need to carry more liability and have restrictive terms attached to their loans.
How to help your credit score
To secure commercial financing, you need a decent credit score (above 600). If your score is below that, it may seem like a difficult task to get it where it needs to be, but there are a few steps you can take to help it along.
- You will need to be aware of your credit report and what is on it.
- Start making small payments on debts.
- Always pay your bills on time
- Make sure that all debt accounts are reported accurately. That way lenders know how much you owe and can judge your ability to repay any new loans.
The importance of having good credit to get finance should never be overlooked. We specialize in helping business owners secure the finance they need –no matter what their credit score is. You may need to take an alternative approach to source funds; you may even have to utilize a credit builder program, but there is always a way!