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Commercial loans can be broken into various scenarios based on the needs of the client. It may be necessary to get part of the loan fixed and part of it on a rolling equity line. With a commercial loan, you can do that without getting two separate loans. You can get the customer a rate that is fixed now then adjusts or is adjustable now and becomes fixed. The potential is unlimited because banks are loaning their own money.
So, ask commercial customers, “What are your goals?” For most commercial properties, the answer is “investments.” Because of that, you must get a figure on their required ROI. If you get them a 5% rate, but it balloons in 5 years and the amortization is only 15 years, then they may be better off on a 6% rate with a 30-year amortization. The payment is less, even though the rate is 1% higher. That difference may influence getting the deal bought and hitting the client’s ROI goals.
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