Commercial Real Estate Loans and Bad Credit

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By now you are probably aware how lucrative commercial real estate loans can be when you play your cards right. But, if you have bad credit or an unfavorable business credit score, you may have always assumed you couldn’t qualify—well think again!

Bad credit can stop most people from doing a lot of things in life and in business. But, the truth is that there are always ways around bad credit or an unfavorable business credit score. Of course, this is not to say that your credit or business credit do not matter, but rather, at least when it comes to commercial real estate loans, if you present your loan request the right way more often than not you will be pleasantly surprised with the outcome.

So, how does one go about presenting their loan request in the right way? Well, for starters, you want to present a complete and well-thought-out picture for exactly why you need a commercial loan. The best way to do that is via a business. If you do not have a business plan, now is the time to create one. Moreover, this plan should clearly lay out the reasoning behind the need for funding, a detailed description of your current or future business, your marketing strategy, pertinent financial information as well as both your long-term and short-term company goals—just to name a few key areas to cover in your business plan. Ideally, the more in-depth you can go with your business plan the better.

As you can see your vision matters and it can help commercial lenders reconsider their loan decision. But, it is important to still address the elephant in the room i.e. your bad credit or unfavorable business credit score with your potential lenders as well as with your creditors. Remember, if you show that you aren’t afraid to tackle your bad credit not will you able to secure commercial real estate loan you will also be to able obtain better loan packages.

Reaching out to Your Creditors

As briefly mentioned, it is your best interest to reach out to your creditors, if you haven’t done so already. By reaching out to them, you can set up manageable repayment plans or receive a possible extension and stop your creditors from taking further unfavorable action towards your business. Moreover, you will able to demonstrate to your potential lenders that you want to do everything in your power to make good on your debts.

Don’t Let Rotten Credit Slow You Down

If you have taken the above-mentioned steps (creating a stellar business plan and attempting to settle your business debts) to heart and you are still having trouble obtaining a loan through a particular commercial lender, remember it is perfectly okay to lender shop. In other words, you should exercise all your options whether that means speaking with traditional lenders such as banks or reaching out to commercial mortgage companies, local credit unions, and private money lenders. Lastly, you should always be open to the idea of investors or partners if your credit is pretty bad.


Happy senior business man making his notes at workDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender

Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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