Business loan applications usually require borrowers offering an asset as guarantee. The asset often comes in the form of a property and what most lenders also prefer. The asset secures your business loan and even helps determine how much you cna borrow depending on the available equity.
Generally, lenders will give you the following borrowing terms:
- 65% of the commercial property’s value
- 70% of the rural property’s value
- 80% of the residential property’s value
However, you will need to check with the lender if this is the case for them. As with different loan types, different lenders also offer slightly different terms so what was mentioned above may not hold true for others.
However, in most cases, if the lender needs to sell the asset to cover the borrower’s business loan, they often sell residential homes faster compared to rural and commercial properties. Therefore, some lenders don’t often lend as much for rural and commercial properties.
It is best to do your research. You also need to figure out how much money you need to understand how much asset or guarantee you must offer. You may also want to consider consulting a financial expert before jumping into things.
If you’re looking for a faster way to get access to capital, then why not check out Gapcap’s offerings. We have made loan application and approval easier than most lenders. Check out our website and how fast it is to get the small business funding you need.