Can You Get Commercial Real Estate Loans in Arizona with No Down Payment?

Getting Commercial Real Estate Loans in Arizona with no down payment can mean the difference between having cash to operate and leaving the doors locked. If you’re trying to obtain 100% financing, hard money could be the answer you’re looking for.

Most Commercial Real Estate Loans in Arizona have strict requirements, including starting with some serious skin in the game. At a bare minimum, you should expect to put 10% down, but more often than not, banks are looking for 20-30%. That can be completely unreasonable for a start-up and is a major barrier for many entrepreneurs.

Adding to this, businesses are put through immense amounts of scrutiny by banks. They’ll check your credit scores, profit and loss, cashflows, and more, all to determine whether you’re a safe bet or not. Even those with the best of credit get denied, simply because they haven’t been in business long enough or because they aren’t making a large enough down payment.

The good news is, the rules shift in your favor when you look beyond bank options. Alternative financing sources like Texas Hard Money Lenders help small-business owners every day and can fund 100% of your property purchase.

LTV is Key to Eligibility

Whereas banks are concerned with how you look as a borrower, Texas Hard Money Lenders are more concerned with what you plan to do with the cash you get. The property you purchase is typically used to secure the funding. This is where LTV comes in. It means “loan to value,” and references how much money you’re borrowing versus the value of your business property when Commercial Real Estate Loans in Arizona are concerned. In other words, let’s say you want to purchase a building, such as an office, warehouse, or rental property, and it’s worth $100,000, but you need the full $100,000 to buy it. Do the math: 100,000 / 100,000 = 1 or 100%. Your LTV is 100%. But, you’re a savvy businessperson and you’re not going to pay $100,000. You negotiate down to $90,000 for the sale or maybe you’re really great and get it down to $80,000. Your LTV is now 90% or 80%. You just made yourself an appealing borrower to a hard money lender.

If you can do basic math, you can get 100% funding for your venture.

Yes, Texas Hard Money Lenders still care whether you can piece together a business plan. They want to know that you’ll be able to pay off the balance within the allotted amount of time. That said, it’s easy to get Commercial Real Estate Loans in Arizona if your LTV is realistic, even if you don’t have a whole lot of your own money to work with or have crummy credit. This is precisely why this method of financing is hugely popular with people who do fix-and-flips and fix-and-holds. With the surge in Airbnb rentals, many are using the model to start their own home businesses too. If it works for them, it will work for you.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.