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Commercial Mortgage Financing For Your Company? This Info Is Your Gamechanger On Finance Success
OVERVIEW – Information on commercial mortgage financing in Canada. The ability to finance a real estate asset has numerous benefits for Canadian business owners
The 2008 and 2009 financial crisis, (worldwide by the way!) affected every aspect of financing. Many financial people still believe the commercial real estate financing still has the ability to become more problematic. Only time will tell on that one, but in the meantime, if you are properly prepared, and you know which solution you need there are still some great alternatives for Canadian business owners. In the context of our article we are discussing owner occupied commercial real estate.
When clients come to us to discuss their commercial mortgage financing needs they have some very specific needs that can neatly be put into a couple categories -
1. They wish to purchase a building versus their current ' lease ' arrangements
2. They wish to re finance their current premises
3. They wish to re do a first, or get a 2nd commercial mortgage to undertake leasehold improvements, expansion, or finally - to use the additional funds for working capital , cash flow, and other forms of possible debt repayment .
For the last several years, prior to the current challenging environment much transaction could be financed at greater than 65% LTV - By LTV we mean of course loan to value, i.e. how much you can finance against the appraised value of the property.
We are happy to point out that there are some circumstances in which financing for up to 90% LTV, in some cases 100% still exist, but they are clearly the rarity, not the norm.
The greater equity or down payment requirements of course put additional challenges to the Canadian business owner who must give up that equity or alternatively make a greater down payment.
While we find that many of our clients are never totally familiar with all their business financing options we can also state they are even less familiar with their commercial mortgage financing options on their business properties.
That is where it is absolutely recommended that they work with a trusted advisor who had credibility, experience and a track record in this area. Planning also helps by the way, and we encourage the customers who come to us to allow 30-60 days for a typical commercial financing from the point that they walk in our door.
Key information required to assess the best Canadian commercial mortgage financing alternative is the facility description and any appraisal, as well as your financial statements. We find it is of great value to ensure these statements accurately reflect your ability to pay back the new financing.
Therefore cash flow coverage, interest coverage, etc are all key parts of the equation. Naturally if you are leasing premises and are going to an owner occupied facility which you are financing the lease costs you are paying now factor positively into that equation.
There are currently some very solid commercial mortgage financing alternatives, for both first and second mortgages. Each business owner has different focus on their ' hot points ' , whether that be loan to value, simply getting approved, ensuring the amortization is long enough, or even flexibility to pre pay or re finance .
Is it ' easy ' to get commercial mortgage financing in Canada? We would say no, is it possible and very achievable with the right data and advisor - absolutely. The right financing will only enhance your owner occupied facility and ensure you are building business or personal equity.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
7 Park Avenue Financial
Office = 905 829 2653
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
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