If you are planning to have a new building constructed for your business, you may have calculated that you will need financial help to complete the project and decided to apply for a loan. If so, get ready for submitting the application by using the tips below for gathering the paperwork required for a commercial construction loan.
Polish up Your Business Plan
One of the requirements for obtaining a loan for your commercial construction project will be a current version of your company's business plan. It should include a section describing the use of the new building and explain how it is a vital part of your business's future endeavors.
If you have not looked at your plan for a while, take some time to update your goals and plan of action to include your new building. Also, update your financial projections to include how much the use of the new building will increase profitability.
Having an estimate of your company's financial future that includes your construction plans gives the institution an idea of how much you will be able to pay per month on your loan. It can also determine the type of interest rates and details to include in the loan contract.
Seek Out Several Contractor Estimates
Along with your business plan and financial estimates, you should also have two or three contractor estimates available to submit with your application. These estimates should include all services you will require, ranging from the general contractor to the drywall and plumbing contractors.
Having several estimates ready for the loan institution helps with two aspects of the loan. First, it gives the bank solid numbers with which to determine the loan amount. When you have more than one estimate, you show that you are not only flexible with the amounts but can give an average of what the various services will cost.
Second, seeking out and obtaining several estimates also shows that you have done your homework on what is required for your business's new building. This readiness lets the bank know that you are serious about the endeavor and are committed to the growth of your company.
Having the necessary paperwork ready before you apply for your loan can help speed up the application process. If you have any further questions, speak with the institution with whom you will be applying for a commercial construction loan and ask about their specific application requirements.