by Merrill J. Conner

General knowledge about commercial loans, is not as widley known as general knowledge of residetial loans.This post is a brief overview of what lenders are looking for in order to invest in a commecial transaction.

3 C's of Commercial Mortgage Lending
1.  Collateral
2.  Cash Flow
3.  Credit and Income

Please note that the 3 C's of Commercial Mortgage Lending are applicable to most income producing commercial real estate properties only.(owner occ/owner op properties will  have slight variations of these rules)

The 3 C's of commercial loans refer tothe most important factors in determining the approvability of a commercial mortgage loan request during the underwriting process. Not meeting any one of the 3 C's is reason enough  to decline a commercial mortgage loan request.

Collateral
Collateral simply refers to the commercial real estate that is offered as security for the commercial loan request. 

In addition, the commercial mortgage document generally requires the borrower to assign the rents and/or leases of the collateralized property giving the commercial mortgage lender additional security. 

Other assets (cross-collateralization) may be used in addition to the primary source of collateral to secure the commercial mortgage. FF&E, contracts, receivables, and in some cases a guarantor's personal assets are all possible sources of cross-collateralization. Learn more about commercial mortgages April 30, 2008 by Merrill J. Conner

Contact:

Merrill J. Conner

480-553-8750(Office)

602-445-4950(fax)

info@transcendfinancial.net

www.transcendfinancial.net