ALL >> Real-Estate-and-Foreclosure >> View Article
New Commercial Equity Loan Creates Liquidity

Commercial building owners have struggled for decades on how to effectively and economically tap their commercial property's equity. This lack of liquidity seems to be one of the biggest complaints in commercial real estate ownership; equity rich, cash poor, as the saying goes.
There are a few new options however for the small commercial property owners (both investors and users) that are turning heads. Historically, accessibility to commercial equity via loan products has been very limited, and for good reason. Second lien position behind a separate financial institution is one of the riskiest positions for a commercial lender to be in.
However, in the past, small local banks have been known to take on these types of loans assuming that the combined loan to value and debt coverage ratios were strong - typically less than 60% LTV and over 1.4 on a DCR. Banks wrote these lines almost like a business loan that happen to be secured by the commercial building. The banks also, wanted a depository "relationship," as bankers always say, with the borrower.
Developer of large sophisticated projects also have had ...
... 2nd lien position loan options, called mezzanine loans. But these types of loans are normally only available to highly experienced and successful developers working on projects over $5,000,000.
Interestingly, a few lenders have recently stepped up and created commercial equity lines aka commercial lines of credit. The result is liquidity never before known for small building owners. Highlights include no upfront fees to close loan (no appraisal, no title, and no environmental fees), combined loan to values up to 75% and relatively low interest rates at Prime plus .75% - 1.25%.
We will see in time how much of an impact these commercial equity lines make on "Main Street" USA, but one thing is for certain: commercial property owners have more loan options now, than ever before.
Add Comment
Real Estate and Foreclosure Articles
1. Stepsstone Vatsa Viraam| Stepsstone Ai Apartments At Kattupakkam|ai Homes At Kattupakkam Near PorurAuthor: Stepsstone
2. Studio Apartment In Noida For A Growing Family | Adopremium
Author: AdoPremium
3. Real Estate In Bahamas: Explore Top Investment Opportunities
Author: Viceroy Bahamas
4. Latest Construction Updates: Jasmine Grand Mall, Bahria Town Lahore
Author: me
5. How To Invest In The Best Real Estate Investments In India
Author: codename oxygen
6. Top Real Estate Company In Dubai: 5 Things You Should Know Before Buying
Author: Gaj properties
7. Why Managed Office Spaces In Bangalore Are The Smart Choice For Growing Businesses
Author: Bizzhub
8. Real Estate Investment In Visakhapatnam: Top Opportunities
Author: Sensation Infracon
9. Luxurious Flats In Baner For Premium Property Buyers
Author: property drone
10. Top Real Estate Developers In Pune For 2025: Leading Builders And Projects
Author: property drone
11. Codename Kamdhenu Neo Nerul Navi Mumbai Pinnacle 2 & 3 Bhk Flats
Author: balakrishna
12. Tired Of Standard Builds Not Delivering Returns? Rooming House Builders Offer A Smarter Solution
Author: Rick Lopez
13. Top 5 Societies Ready To Move In Homes In Raj Nagar Extension Ghaziabad
Author: Houseeazy
14. Invest In Happiness: Senior Living Apartments For Sale In Delhi Ncr | Bigchamps
Author: Big Champs
15. Steps To Take When You Plan Your Kitchen And Bathroom Installations
Author: Vikram kumar