By : Radu Arvatescu
Shopping for a commercial mortgage is one of the most important things you will do in business. Finding the perfect property is only the beginning. Securing a loan to purchase that property is where things can get complicated.
Commercial rates are typically higher than residential ones. The process of finding and signing for a mortgage can be difficult if it’s your first time.
To secure the future of your business, learn what you need to do to get the best commercial mortgages.
Develop a Detailed Business Plan
Any time that you apply for a business loan, including a mortgage, you will need to develop a business plan. This document will outline the purpose of your business, along with various operational details that will help a lender to determine risk.
Your business plan should provide details at a high level. Basic inclusions are:
- Company description and executive summary.
- A market analysis that shows the research of your industry, competition, and target market.
- Organizational structure including partners and employees.
- Details of your service or product offering.
- Your marketing strategy.
- Necessary funding sought, including your mortgage, loans, and future investment.
This information will allow a lender to understand your company, its future viability, and the amount of lending that you might qualify for.
Get Your Finances in Order
In addition to a business plan, lenders will want to see financial documentation. If you have stable finances, you will be more likely to secure options for the best commercial mortgages. Business financials and an operating statement are essential. A declaration of income along with authenticated statements will add more value to your mortgage application.
If your business is in debt, then you need to be actively engaging in repayments. Defaults on previous loans could limit your chance of finding the best commercial mortgages. Just like in the residential market, you will need to demonstrate a reasonable debt to income ratio. Investments and future projections could offset your current debt, but every lender looks at this data differently.
Be as detailed as possible in your financial documentation.
Gather All Documentation
Collect all your documentation (business plan, financials, etc.) and make copies of it. If you have paper documentation, digitize it as soon as possible. This will be requested by lenders when you begin the application process.
Work with a Broker for the Best Commercial Mortgages
Finally, we come to one of the most critical steps in securing the best commercial mortgages. While it is possible to explore your options directly through lenders, the process can be both complicated and time-consuming. If you run a small or medium-sized business, you probably won’t have the resources to go back and forth with lenders.
A broker can help. For most businesses, this is the best way to secure a competitive loan at an affordable rate and fair terms. Brokers maintain large professional networks of lenders, legal professionals, and real estate professionals. You can leverage these contacts to shop for the best loan without investing an unreasonable amount of time.
A broker will analyze the needs of your business and actively shop for the best rates. They will also provide ongoing support to ensure that you have the right information and documentation to secure a mortgage. Best of all, you will get realistic options to get your business moving forward.
Shopping for a commercial mortgage can be simplified. A mortgage broker in Ontario will act as your advocate and partner to achieve the best possible outcome.
To book an appointment to discuss your needs and learn more about how Mortgage Capital Investment can help you, call 416-877-7438 or
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||Bank Rate|
|3 Year Fixed/ 25 yrs||2.54||2.850%|
|3 Year Variable/ 25 yrs||0.99% Promo||1.86%|
|5 Year Fixed/ 25 yrs||2.64%||2.84%|
|5 Year Variable/ 25 yrs||1.20% Promo||1.65%|
|5 Year Fixed/ 30 yrs||2.74% Promo||3.04%|
|5 Year Variable/30y||1.45||1.85|
Updated: JAN 17, 2022
* Current promotion rates may provide an additional 0.05% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA* * Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.