Michna Law Group has received tons of questions over the years pertaining to real estate law. Today, we'd like to cover the concept of commercial financing and why it's important.Financing enables individuals to purchase something without paying the full price up front. In terms of real estate, this method of purchase permits individuals and/or businesses to buy residential and commercial real estate without paying the full amount at the closing.
When financing non-residential real estate, the buyer(s) generally obtains funds from a bank, insurance company, or another lender for the acquisition, development, and operation of a commercial real estate venture.
In order to finance commercial real estate, you'll need to secure a commercial financing loan, usually using assets owned by the debtor (you). These assets act as collateral for the investment of the financial entity lending the loan.
Collateral assets, outside of additional real estate, can include the following:
- Fixtures
- Equipment
- Bank and/or Trade Accounts Receivables
- Inventory
- General Intangibles
- Supplies.
Lastly, an assortment of documents is needed to secure the commercial real estate loan. These can include:
- Loan Agreements
- Promissory Notes
- Mortgages
- Deeds of Trust
- Assignments of Rents and Leases
- Financing Statements
- Environmental Indemnity Agreements
- Guaranties
- Subordination
- Non-disturbance and Attornment Agreements
- Estoppel Certificates
For further information on real estate law, please contact Michna Law Group by phone at 847.446.4600 or by email at BJM@MichnaLaw.com.
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