888-505-5835
100% Financing?
Creative Solutions
888-505-5835
90% to 100% Financing Solution
For investment property or commercial property
Contact us now !!
888-505-5835 ● info@kgfacapital.net
Many business owners believe they need a large cash down payment to purchase commercial real estate. In many cases, there is another option.
We can often structure 90% to 100% financing for businesses purchasing commercial or investment real estate by combining a business loan with a commercial real estate loan. (business purpose only)
Example Scenario
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Purchase Price: $1,000,000
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Typical Commercial Loan: 80% Loan-to-Value ($800,000)
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Required Down Payment: 20% ($200,000)
Instead of requiring the business owner to bring the full $200,000 to closing, we obtained a $200,000 business loan to cover the down payment. The remaining $800,000 was financed through a commercial real estate loan.
In this particular transaction, the seller agreed to pay the closing costs. As a result, the buyer purchased the property with $0 out of pocket.
Qualification Requirements
To structure financing this way, the business generally should:
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Have been operating for at least 2 years.
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Demonstrate strong and consistent cash flow and other factors to qualify for a business financing.
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Qualify for both the business loan and the commercial real estate loan.
When underwriting the transaction, the payment on the business loan is typically included in the property's Debt Service Coverage Ratio (DSCR) analysis. Therefore, the business must generate enough cash flow to support both loan payments.
Alternative Option
If the commercial loan is structured as a No DSCR program, the payment on the business loan generally does not have to be included in the DSCR calculation. However, these programs often require a larger down payment, typically 30% to 40%, depending on the lender and transaction.
Every transaction is unique, but for qualifying businesses, combining a business loan with a commercial real estate loan can significantly reduce—or in some cases eliminate—the cash required at closing.