Once a lender decides to offer a loan to a business for commercial rental property, they will present the business owner with a commitment letter, or loan agreement, with the terms included. The loan agreement will usually include the following components:
- The length of the loan
- Interest rates (either variable or fixed)
- Purpose of the loan (construction on a property, renting of a new property, refinancing)
- Closing conditions
- Affirmative and negative agreements regarding what the borrower does and does not agree to do
- Owner occupancy requirements
- Warranties and representation.
Once the borrower and lender have finished negotiating the terms of the agreement and mutually agree, the deal is closed, and the closing process for commercial real estate is usually more involved than for a residential mortgage, owing to different factors that might have to be considered in the process (everything from subleasing to zoning ordinances). This process could take up to two or three months, in some cases.
When negotiating a loan agreement to fund your office space rent in Kansas City, the key is to find a lender that will best meet the needs of your business and allow it to grow. Knowing the ins and outs of how to find and negotiate a loan can help put your business on track for growth.
If you want to find out more about affordable office space in Overland Park, give us a call at 913-685-4100!