What does it take to get a commercial loan in Vermont?
The is the National Bank of Middlebury. We've worked with them for years.
The short answer? Much more than it used to. There was a day when banks approached us. Once you could get a loan for a hospitality property based solely on a great business plan. Today it is a bit more complicated. Now banks want to see more money, more business experience and another source of income.
To get your foot in the door many banks require 20% Down. To make it work with your bank, you’ve got to approach them with better business plans and greater flexibility.
These days when you buy and inn or B&B, the bank often wants to see another source of income. In the hospitality industry, this can be a nice possibility. You can telecommute from a beautiful inn. The right inn or B&B will provide you with a great place to live (rent-free) and room to keep your office.
Here are some other ways to improve your chances of getting that commercial loan:
- Work with an experienced Realtor who knows lodging properties.
- Research your options. Look at commercial loan terms from different banks and other commercial lenders. Try several banks. Don’t give up.
- Get a great lawyer. Find a commercial real estate attorney who specializes in hospitality properties.
- Have a great business plan. Make sure your business plan is water tight. Show your business strengths; Plan for contingencies, Back it up with good data. Here are some tips from the SBA.
- Have some cash to put down
- Look into SBA Loan programs
Take courage. Small banks are ready to talk to you. From a recent story on Marketplace (an American Public Media radio program): “A small bank that is strong, they want to do business with you right now. So you should go talk to them.” We had great luck with the National Bank of Middlebury and will be happy to introduce you.
$ image credit: SBA