Let’s take a look at the difference between a commercial real estate loan with an ordinary lender versus a SmartChoice® Commercial Loan.
Most ordinary bankers will finance 70 to 80 percent loan-to-value, meaning the lesser of appraised value or purchase price. This causes you to put more of your hard-earned capital down and come out-of-pocket for other costs.
The SmartChoice® Commercial Loan
We not only finance loan-to-cost -- the true project cost not just purchase price -- but if renovations are involved, we finance those, too. We also finance soft costs, things like permitting and impact fees, and architecture and engineering fees. Plus, we finance closing costs, and in most cases we can even finance FF&E (furniture, fixtures, and equipment).
Add all hard and soft costs together, and we generally finance 90 percent of the total project amount. Compare this to the 70 to 80 percent loan-to-value of just the property offered by the bank, with no financing of most soft and closing costs. When you get a commercial real estate loan from an ordinary bank, you are essentially putting 20 to 30 percent down plus soft and closing costs. But with us it's a true 10 percent.