Finding the Right Commercial or Investment Loan


 

 

Loan Programs & Property Types

 

 

 

 

Market Rates & Guidelines

ICS loan rates are based upon the LIBOR index and US Prime Rate. Loans are sold or assigned to competing Lenders and Private Investors. Below are the general market guidelines under which ICS funds most loans.


Conforming Loans

Commercial , Multifamily & Investment Properties

(does not include land loans)

Max Loan-to-value

75%

Debt Coverage Service Ratio 

1.2

Closing Time Frame 

45 - 60 Days

Full loan application required including 2-3 years personal tax returns, property operating statements, rent rolls, good credit.


Hard Money Loans

Commercial , Multifamily & Investment Properties

(does not include land loans)

Max Loan-to-value

75%

Closing Time Frame 

10 - 30 Days

Borrower Must Have a Legitimate Exit Strategy to Payoff Loan


Hard Money Loans

Non-Income Producing Land

Max Loan-to-value

50%

Closing Time Frame

10 - 30 Days

Borrower Must Have a Legitimate Exit Strategy to Payoff Loan


Commercial Office, Retail & Industrial Properties

(Business Owner-occupied)

Max Loan-to-value 

90%

Closing Time Frame 

45 - 60 Days

Full loan application required including 2-3 years personal tax returns, business profit and loss last 2 years, property operating statements, rent rolls, good credit.

> Learn More about SBA Loans


 

Property Types ICS Finances

 

  • Apartments - Multifamily
  • Self Storage Facilities
  • Single-Family Flip Projects
  • Office Buildings
  • Land Development
  • Warehouse
  • Equipment/Machinery
  • Retail Centers
  • Mobile Home Parks
  • Raw Land
  • Resorts
  • Restaurants
  • Mixed Use
  • Convenience Stores
  • Gas Stations

 

  • Car Wash
  • Hospitality
  • Hotel/Motel
  • Tavern
  • New Residential Development
  • Pawn Shops
  • Golf Courses
  • Marinas
  • Auto Body Repair
  • Industrial
  • Owner Occupied Business
  • Special Purpose Properties
  • Conversions
  • Medical
  • Gold Mines

Conforming vs. Hard Money

There are two primary loan categories all property financing transactions will fall under, conforming (best rate), and non-conforming (higher rate). Best rate conforming loans usually take 45 - 90 days to close. Non-conforming are considered either Alt-A or Hard money / Bridge loans. Non-conforming Alt-A loans offer rates slightly higher than conforming, with more flexible credit and property requirements. Closing periods are the same as conforming loans.  Hard money / bridge loans are used for short-term purposes, usually 3-24 months. These loans can be closed in 5-7 days, and usually always close in less than 30 days. Hard money / bridge loans require less documents, but rates are much higher, usually between 8% and 12%.

We offer conforming loan programs with initial fixed rate periods of 3, 5, 7 and 10 years as well as 15, 20, 25 and 30 year fixed loans. These loans are what we call "full doc" loans, offering the best rates available on the market, and are usually sold, transferred or brokered to major banks, hedge funds, and insurance companies. Underwriting approval requirements will usually include the following documents from the borrower for best rate conforming loans:

1.) Property Rent Roll

2.) Property Operating History / Profit & Loss - Last two year and Year-to-date

3.) Borrowers Financial Statement  w/Schedule of Real Estate

4.) Personal & Property Tax Returns (not always but usually)

It usually takes 45 to 90 days to close a conforming loan.

Conforming - 3, 5, 7 & 10 Year ARM's

Loans with a fixed rates for the first 3, 5, 7 and 10 years. After that the initial fixed rate period, these loans have an adjustable rate that changes once each year for the remaining life of the 30 year loan.

Benefits

Since the rate is lower with this type of ARM product, a borrower can save money on their commercial real estate mortgage payment for the first three to ten years. After the initial fixed rate period, the loan will be subject to an adjustable interest rate. The interest rate on the loan can change every six months to one year. The interest rate is going to be tied to a financial index and will move up and down, based on that index. Usually, there will be an interest rate cap on the loan. This means that if the financial index moves substantially, the interest rate on the loan will be capped at a specified amount.

The primary benefit of this type of loan is that a borrower will be able to get a lower interest rate initially. This makes the 3, 5, 7 or 10 year ARM ideal for properties that have a lower rental income and expects their rental income to increase over the next three to ten years. This type of loan is also usually used if the property owner is planning on selling or refinancing the property within the fixed rate period.

Drawbacks

Even though this loan can be beneficial,it also has some drawbacks. When this type of loan is used, the borrower subjects themselves to market interest rates after the initial fixed rate period. If the interest rate in the market increases substantially after the fixed rate period, the loan payment may go up substantially if the property is not sold or refinanced.

 

 

Hard Money / Bridge Financing

 

 

 

 

Hard Money / Bridge Financing

ICS Hard money/ bridge loans can be closed in 5-7 days, and usually always close in less than 30 days. Hard money / bridge loans require far less documents, are not borrower credit based, with rates usually between 8% and 12%. We offer hard money / bridge financing for projects where short-term capital is needed for 3 - 24 months, usually bridging the time gap between attaining long-term financing or a future property sale. Underwriting and approval requirements are extremely flexible.

1.) Approval based off equity and LTV

2.) Max LTV 75%

3.) Minimal underwriting deposit required

4.) Poor borrower credit ok

5.) 1st and 2nd lien positions

6.) Loan amounts $25,000 to $200,000,000

7.) Rates between 8% and 12%

8.) 3-7 Lender points depending on property type and loan size