Commercial Financing in British Columbia
Commercial financing is about more than finding a rate. It is about structuring the application properly and presenting it to a lender with an appetite for the property and transaction.
Doug works with business owners, investors and property owners to arrange commercial purchase financing, refinancing, equity take-outs and specialized mortgage solutions throughout British Columbia.
Commercial Lending Requires the Right Presentation
Commercial lenders do not all finance the same property types. One lender may be interested in an owner-occupied industrial building, while another may prefer apartment buildings, mixed-use properties or income-producing retail space.
A poorly prepared application sent to unsuitable lenders can create delays and make the transaction more difficult. The property, borrower, income, loan request and repayment strategy should be organized before the application is presented.
Doug will review the complete transaction, identify the important risks and strengths, and approach lenders whose guidelines are most compatible with the request.
Commercial Property Financing
Owner-Occupied PropertyFinancing for businesses purchasing or refinancing the building from which they operate, including office, retail, warehouse and industrial properties. |
Investment PropertyFinancing for income-producing commercial real estate, including multi-unit residential, retail, office and industrial investments. |
Mixed-Use and Unique PropertiesProperties with residential and commercial components, specialized uses or characteristics that may require a more flexible lending approach. |
Common Commercial Financing Requests
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✓ Purchase of commercial property ✓ Refinance of an existing commercial mortgage ✓ Equity take-out for business or investment purposes ✓ Owner-occupied business premises |
✓ Rental and investment properties ✓ Mixed-use buildings ✓ Short-term bridge financing ✓ Alternative and private commercial mortgages |
Owner-Occupied Versus Investment Property
Owner-Occupied Commercial PropertyWhen a business occupies the property, the lender will usually review both the real estate and the financial strength of the operating business. Business cash flow, industry experience, financial statements and the borrower’s investment in the transaction may all be important. |
Commercial Investment PropertyFor an investment property, the lender will focus heavily on rental income, operating expenses, leases, vacancies and the property’s ability to support the mortgage. The borrower’s financial strength and experience may also be considered, particularly if the property income is limited or the transaction is more complex. |
What Commercial Lenders Review
Commercial applications are assessed as complete transactions. The lender considers the property, borrower, income and requested loan together.
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✓ Property value and marketability ✓ Property type, use and location ✓ Rental income and operating expenses ✓ Existing leases and tenant quality ✓ Vacancy and market-rent assumptions |
✓ Borrower net worth and liquidity ✓ Business or investment experience ✓ Financial statements and tax returns ✓ Credit history and existing obligations ✓ Purpose and repayment strategy |
Income and Debt-Service Coverage
For income-producing property, lenders generally compare the property’s available net income with the proposed mortgage payments.
The lender may adjust the reported income or expenses when underwriting the transaction. Vacancy allowances, management, repairs, reserves and market expenses may be considered even when the borrower’s current statements show different amounts.
Doug will help organize the income and expense information so that the lender can clearly understand how the property performs.
Down Payment and Available Equity
Commercial PurchaseThe required down payment depends on the property type, location, income, condition, borrower strength and lender. Specialized properties may require more borrower equity. |
Commercial RefinanceAvailable proceeds depend on the confirmed property value, existing mortgage balances, property income, requested loan and lender loan-to-value limits. |
The Commercial Appraisal Matters
A commercial appraisal may consider the property’s income, comparable sales, replacement cost, leases, zoning, marketability and permitted use.
The lender may require that the appraisal be ordered through an approved process or completed by an appraiser acceptable to that lender. It is usually best to confirm the lender’s requirements before ordering the report.
Additional Reports May Be Required
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✓ Environmental site assessment |
✓ Rent roll and copies of leases |
Commercial Lender Options
Conventional LendersBanks, credit unions and institutional lenders may offer competitive terms for properties and borrowers that fit their guidelines. |
Alternative LendersAlternative lenders may accept different income, property or borrower profiles, often with higher pricing or additional conditions. |
Private LendersPrivate financing may provide a short-term solution for urgent, unusual or transitional commercial transactions. |
The Commercial Financing Process
1. Initial ReviewWe review the property, borrower, financing request, purpose, timing and documents already available. |
2. Structure and PresentationDoug organizes the transaction, identifies suitable lenders and presents the strengths, risks and repayment plan. |
3. Approval and ClosingWe review the lender’s terms, satisfy the conditions and coordinate the appraisal, legal work and funding. |
Allow Enough Time
Commercial financing generally takes longer than a residential mortgage because of the additional underwriting, valuation, documentation and legal review.
The timeline may depend on how quickly financial statements, leases, appraisals, environmental reports and lender conditions can be completed.
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✓ Appraisal and report costs ✓ Environmental or inspection costs ✓ Legal fees |
✓ Lender fees, where applicable ✓ Brokerage fees, where applicable ✓ Other transaction-specific costs |
Why Work With Doug?
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✓ More than 35 years of lending experience ✓ Experience structuring complex transactions ✓ Relationships with commercial financing sources |
✓ Clear review of terms, costs and conditions ✓ Guidance from initial review through closing ✓ Commercial financing throughout British Columbia |
Let’s Review the Property and the Numbers
Tell Doug about the property, requested financing, income, down payment or equity, closing date and any challenges you have encountered. He will explain what information is needed and help determine the most appropriate next step.
Call Doug: 604-820-4570
Commercial Mortgage Financing in Mission and Throughout British Columbia
Doug Lifford Mortgage Services helps business owners, property owners and investors in Mission, Abbotsford, Chilliwack, Maple Ridge and communities throughout British Columbia arrange commercial purchases, commercial mortgage refinances, mixed-use property financing, owner-occupied commercial mortgages, investment property financing and private commercial mortgages.
Commercial financing terms, loan-to-value limits, debt-service requirements, fees, timelines and lender policies vary by property and transaction. This page provides general information only. Obtain personalized mortgage, legal, accounting, appraisal, environmental and tax advice before proceeding.