How can I know how much of a loan I need to purchase the “Inn of my/our dreams?”

Answer:  A LOI (Letter of Interest or Term Sheet) in commercial lending is issued after a preliminary underwriting determination has been made. The buyer’s qualifications and the data from the commercial property are combined to assess the risks versus the merits of the loan application.

Financial records on the business/property being acquired will be needed to determine that the Debt Service Coverage Ratio (DSCR) will comply with general underwriting guidelines after items such as depreciation, officer’s salaries, mortgage interest, and certain non-re-occurring expenses are added back to the net profit/loss.  The loan amount will be determined after all data from the borrower/s and the subject property is compiled and analyzed by one of our Commercial Loan Underwriters.

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