Frequently Asked Questions

Our commercial finance advisors are ready to answer your questions and provide you with the best lending option for needs. We've listed a few common questions below.

What size loans can Sierra Commercial Capital handle?

We can handle all commercial loan sizes from $5,000 for equipment or merchant cash advances to well over $20 Million for large Commercial Real Estate financing facilities.  All clients are important to us, regardless of the size of the deal, however Commercial Real Estate transactions typically need to be over $200,000.

How are you different from a Bank?

As a commercial loan broker, we specialize in helping small business owners and investors connect with loans for their business or commercial uses.  Chances are, you've already worked with other brokers, such as insurance or real estate brokers, in the past.  We work the same way - as an intermediary between two parties - a lender and a business.  

While a bank is limited to their own product offerings and credit approval box, commercial loan brokers have a much bigger tool belt with options to best fit YOUR needs.  A good broker will spend time explaining options and will serve as and adviser and advocate in securing your financing.

 

 

How is Sierra Commercial Capital different from other Loan Borkers?

If you need honest and experienced partners to help you through the loan process, we can help!  Our firm has a long list of well established funding connections for all types of credit and loan scenarios.  We have a wide range of industry knowledge gained by years f experience in banking and finance. 

 

What do I need to apply?

Documents needed for a business loan vary depending on the type of loan, amount being financed, and lender we place the loan with.  Just fill out some basic information here to  get started!

What type of Business and Industries does Sierra Commercial Capital work with?

We work with almost any business and all types of industries. Small, medium and large businesses work with Sierra Capital to handle their financing needs.

Who are Sierra Capital's lenders?

We have a relationship with over 100 lenders.  Our lenders include small banks, community banks, private lenders, insurance companies,  credit unions.  We seek out lenders who have a niche or specialty related to all types of alternative financing.

What States do you lend in?

Although we have lenders who work in all 50 States of the US, our focus is on businesses and investors who are based in California, Oregon, Washington, and Hawaii.  

Do you offer Start-Up Financing?

For start-up's we only offer equipment financing, lines of credit, and loans against existing 401K's (commonly-used to fund franchise businesses).

Here are a few breakdowns of the minimum requirements for start-up's......

401(k)
- $15,000 or more in 401k
- No Credit Pull

Lines-of-Credit
- 680+ FICO
- 50% Revolving Utilization

Equipment Leasing
- 620 FICO
- Limited Paperwork

 

How long does it take to receive funding?

The funding timeline largely depends on the type of loan, how fast documentation can be returned, and if there is a need for an appraisal or environmental review for real estate.  For SBA and traditional financing, the time frame is typically between 30-90 days. For alternative financing about 5-10 days. Merchant cash advances take 1-2 days.

What are your fees?

Our fees are very competitive and are built into the pricing disclosed on a term sheet and can vary depending on the complexity, type of financing required, and loan amount.  

What credit score do I need to qualify for funding?

Most bank and SBA financing will require a credit score over 650. For other forms of alternative financing, credit score requirements can range from 500-650. Any time the lender risk is higher, the higher the borrowing rates.  We work with all types of credit, so if ever in doubt reach out to us! 

Do you run a credit report on the owner of the business?

We recommend checking your personal credit scores before applying using a service like Kredit Karma.  We don't send your loan to 10 lenders to see what sticks - and having an accurate score helps us zero in on the type of credit you would qualify for.  Some lenders will want a soft credit pull prior to issuing a commitment letter.  Most will run a hard pull in the underwriting process sometime prior to funding.  

How much do Commercial Appraisals cost?

Typically a commercial appraisal in California will cost anywhere from$2,000 to $5,000 dollars.  This fee can vary depending on the scope of work, property type, location, and timing. For complex and/or special use properties, the fee can go as high as $10,000+

If your only experience purchasing real estate is with residential property, this can be a bit of a sticker shock.  There usually three components that go into a commercial appraisal: 

  • The Cost Approach
  • The Sales Comparison Approach
  • Income Capitalization Approach 

How do you distinguish between a business and a hobby?

From IRS.gov ...

In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

  • Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  • Whether the time and effort you put into the activity indicate you intend to make it profitable.
  • Whether you depend on income from the activity for your livelihood.
  • Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  • Whether you change your methods of operation in an attempt to improve profitability.
  • Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  • Whether you were successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

You may find more information on this topic in section 1.183-2 (b) of the Federal Tax Regulations.

We can not make business loans on a hobby.

Can i get a business loan without collateral?

Yes, you can get an unsecured business loan between $10k and $150k without collateral. For this you would need:

  • 680+ FICO score
  • No bankruptcies, liens or judgments
  • No more than 5 bank inquiries in the last 6 months
  • Having a mortgage is helpful.  No late payments is essential.  

 

What do commercial loan brokers do?

Commercial loan brokers act as the liaison between banks or other lending institutions, looking for a suitable business loan to help borrowers finance, renovate, or purchase their commercial properties. They can help negotiate on a borrower's behalf to secure a better deal, and can help guide a borrower through the application process

Why use a commercial loan broker?

Commercial brokers are well-versed when it comes to liaising with banks and financial institutions and finding the best loans to suit your plans for your commercial property. Brokers can offer a wider array of choices, they can help you negotiate mortgage terms to make them flexible, and they work solely for you and not for the bank or other lenders.

Commercial finance deals can be quite complex and difficult to navigate. This is why a good commercial broker's expertise can be a valuable tool.

How do I qualify for a Commercial Morgage?

If you have a business or other commercial entity, you can apply for a commercial mortgage. The business and the owning entity, whether it be you as an individual or not, must have a solid credit history to be approved.

When assessing your loan, lenders will consider:

Corporate financial details. Details of the business’ profits, assets, and liabilities will be required. If you are just starting out, you must provide financial projections.

The value, or projected value, of the property. The property is used by the lender as security against your loan.

Personal financial details. As you will be taking out the loan, you are expected to have a good credit history as well. Bring details of your own personal finances, expenses, and assets.

How to choose the right commercial loan broker

Find a broker that you like to work with, as you will need to build a strong relationship and set the foundation for solid communication.

You should also consider the panel of lenders your broker works with. Brokers that have access to a broad array of lenders may be able to negotiate a better rate for you.

Experience is also an important factor, particularly considering the complexity of most commercial lending deals. Research the broker’s reputation to ensure that the broker and the company they work for are reliable.

If you reside in California, be sure your broker is properly licensed.  Also look for brokers who have been vetted with professional associations like the American Association of Commercial Finance Brokers or with the Better Business Bureau.   

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