Frequently Asked Questions

What type of commercial properties do you finance?

We finance a wide range of commercial properties including multi-family properties, mixed-use properties, commercial buildings, shopping centers, industrial properties, Self-Storage, warehouses, land for development, office buildings, retirement homes, and hotels.

What types of commercial mortgage loans do you specialize in?

Our commercial mortgage broker services specialize in both short-term and long-term financing. We provide services for purchase, refinancing, CMHC, first & second mortgages, and construction financing. We also offer various types of loans such as bridge loans, mezzanine and equity loans.

Do you work with businesses of all sizes?

Yes, we cater to small businesses, developers, and large investors alike.

What sets you apart from other commercial mortgage brokers?

We bring to the table over 50+ years of combined commercial mortgage lending experience and have strong lender relationships. We've helped clients fund hundreds of millions in commercial properties, navigating through complex asset types and unique ownership structures.

What is the typical timeline for approval and funding of a commercial mortgage?

Obtaining full credit approval typically takes 15 to 30 days, with funding taking an additional 10 to 15 days. However, with proper preparation, there are opportunities to expedite this timeline.

What is the Loan to Value ratio in a commercial mortgage?

Conventional lenders typically offer a maximum Loan to Value of "up to 75%" of the property's purchase price or appraised value. This means a minimum down payment of 25% is required for new purchases or refinancing. However, LTV requirement vary based on the type of mortgage, for example CMHC loans can have LTV of up to 95%.

What are the eligibility criteria for a commercial mortgage in Canada?

Eligibility for a commercial mortgage depends on several factors, including the borrower's credit history, income, the property's value and potential rental income, and the Loan-to-Value (LTV) ratio. Some lenders also consider the borrower's business experience and the stability of the industry in which they operate.

How is the interest rate determined for commercial mortgages?

Interest rates for commercial mortgages are influenced by several factors, including the prime rate, borrower's creditworthiness, property type, and loan terms. Commercial mortgage rates can be fixed or variable. Fixed rates are generally priced over the corresponding government bond rate plus a spread.

What is the typical loan term for commercial mortgages?

Commercial mortgage terms typically range from 5 to 20 years, with amortization periods up to 30 years. The specific loan term depends on various factors, including the lender, borrower's financial profile, and property type.

Can I get pre-approved for a commercial mortgage?

Pre-approval for a commercial mortgage can give borrowers a sense of their borrowing capacity and increase their negotiating power. However, commercial mortgage pre-approvals are not as common as residential ones. It's best to contact a commercial mortgage broker to discuss your options.

What documents are required to apply for a commercial mortgage?

Typical documents required include a completed application form, credit report, business financial statements, personal financial statements for guarantors, property appraisal, and lease agreements. This list may vary based on the lender's requirements and the complexity of the deal.

How much down payment is required for a commercial property?

Typically, a minimum of 20% to 25% down payment is required for a commercial property. This can change based on the lender's risk assessment and the property type.

Are there any specific property types that lenders prefer or avoid?

Lenders generally prefer standard commercial properties like office buildings, retail centers, and multi-family properties. However, some lenders might avoid riskier property types such as restaurants or hotels.

What factors do lenders consider when evaluating a commercial mortgage application?

Lenders typically evaluate the borrower's creditworthiness, the property's value and income potential, business stability, and the borrower's experience in the property type and industry.

Can I use the property's projected income to qualify for the mortgage?

Yes, lenders often consider the potential income from the property when evaluating a commercial mortgage application. This is often expressed as the Debt Service Coverage Ratio (DSCR).

Can I refinance an existing commercial mortgage?

Yes, refinancing a commercial mortgage can help you secure a lower interest rate, change your loan term, or access equity in your property.

Are there any government-backed programs for commercial mortgage financing?

In Canada, the Canada Mortgage and Housing Corporation (CMHC) offers insurance for commercial mortgages, which can help borrowers secure better rates and terms.

Can I get a commercial mortgage for a property that needs renovations?

Yes, many lenders offer commercial construction and improvement loans that can be used to finance renovations. These loans are typically short-term, with the option to convert to a standard commercial mortgage once the renovations are complete.

How are commercial mortgage prepayment penalties calculated?

Prepayment penalties for commercial mortgages are typically calculated as an interest rate differential or as a percentage of the outstanding balance. The exact calculation can vary based on the terms of your mortgage.

What are the differences between recourse and non-recourse commercial mortgages?

A recourse commercial mortgage allows the lender to go after the borrower's other assets if they default on the loan. In contrast, a non-recourse commercial mortgage limits the lender's recovery to the property serving as collateral.

Can I use multiple properties as collateral for a commercial mortgage?

Yes, it's possible to cross-collateralize multiple properties under a single commercial mortgage. This can increase your borrowing capacity but also increases risk as all properties are subject to foreclosure if the loan defaults.

Are there special considerations for purchasing a mixed-use property?

Mixed-use properties can be more complex to finance due to their combination of commercial and residential spaces. Lenders typically consider the income potential and risk associated with each use and may require a higher down payment or offer a lower LTV ratio.

How can I improve my chances of securing a competitive commercial mortgage rate?

Improving your credit profile, increasing the down payment, demonstrating strong business performance, and working with a qualified commercial mortgage broker can help you secure a competitive rate.

Can I transfer my existing commercial mortgage to a new property?

Mortgage portability is generally more common with residential mortgages. For commercial mortgages, this will be dependent on the lender and the terms of your mortgage agreement. Always check with your lender or broker for specific details.

Please note that this information is a guideline and may not apply to every situation. The best way to find out more about your unique situation is to reach out to us directly.