Mortgage options for new businesses in Winston-Salem, NC
If your new business is looking for a way to obtain funding, Mortgages By Jill can help you find the right financing option. While financing can be an issue for new businesses, we can help you learn more about how to get a mortgage in Winston-Salem, NC as well as which type is best for you. Keep reading to learn more about available options.
Permanent loan
What is it?
A permanent loan is typically a long-term loan that comes with a term of at least five years but 25 years is typical. These loans typically come with the lowest available interest rates. This type of loan is most similar to a residential real estate loan as it doesn’t come with any additional risks.
How do you qualify?
Qualifications require that a business owner hold a credit score above 700 as well as sustain one or more years in business. A debt 1.25 debt service coverage ratio is also required.
Hard money loan
What is it?
A hardy money loan is a fast way to get money for a property purchase or renovation. While most loans and mortgages are granted based on the borrower’s credit score and repayment history, a hard money loan is valued based on the value of the property. As with all mortgages, there are pros and cons to hard money loans. While this is a convenient and flexible method of borrowing, you will likely end up paying more in interest over a shorter period of time than other options. However, a hard money loan could be right for you and your business if you’re in a pinch.
How do you qualify?
In order to qualify for a hard money loan, you must have previously completed at least one to three commercial projects. Additionally, you, as the business owner, must have a FICO credit score of at least 600.
SBA 7(a) loan
What is it?
SBA 7(a) loans can range in amounts from $50,000 to $5 million. This funding can be used to buy or expand a business or purchase capital for operation. An SBA 7(a) loan offers the flexibility of the borrower to use the funding for these tasks, while other loans do not. However, you will find that a down payment and interest rate are not as friendly to the business owner.
How do you qualify?
An SBA 7(a) loan qualification requires a personal FICO score of 680 and above as well as at least two years of operation and two years of stable cash flow. A minimum 10 percent down payment is also required. Your business must have between 10 and 1,000 employees and own 51 percent of the existing building as well.
SBA 504 loan
What is it?
When a business owner obtains an SBA 504 loan, it’s important to have an understanding of the necessary requirements for using funds. An SBA 504 loan can be used for purchasing real estate and equipment, each of which come with their own fixed terms of 20 or 25 years for real estate and 10 years for equipment. Furthermore, this loan offers amounts from $125,000 up to $20 million with a fixed interest rate.
How do you qualify?
To meet qualification standards for an SBA 504 loan, the business owner is required 51 percent owner occupancy in an existing building as well as a 10-year minimum economic life on any financed equipment.
Get in touch with Jill
Get started finding the right mortgage option for your new business today. Get in touch with Jill Burgess and the rest of the team at Mortgages By Jill so we can help you get approved for your mortgage in Winston-Salem, NC
