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June 25, 2025

Are 30-Year Fixed Rate Loans Available for Texas Commercial Properties?

htmlCopyEdit Are 30-Year Fixed Rate Loans Available for Texas Commercial Properties? Are 30-Year Fixed Rate Loans Available for Texas Commercial Properties? Understand how investors and business […]
June 25, 2025

Texas Commercial Cash Out Loans: Unlocking Business Growth

Texas Commercial Cash Out Loans: Unlocking Business Growth Texas Commercial Cash Out Loans: Unlocking Business Growth Leverage your property equity to expand, upgrade, or consolidate business […]
June 25, 2025

How to Do a 90 CLTV Loan on Commercial Real Estate in Texas

How to Do a 90 CLTV Loan on Commercial Real Estate in Texas How to Do a 90 CLTV Loan on Commercial Real Estate in Texas […]
June 25, 2025

Texas Commercial Cash Out Loans: Buy Real Estate with $0 Down

Texas Commercial Cash Out Loans: Buy Real Estate with $0 Down Texas Commercial Cash Out Loans: Buy Real Estate with $0 Down Discover how Texas commercial […]
June 22, 2025

Comparing Construction vs. Mini‑Perm Loans for Texas Developers

Comparing Construction vs. Mini‑Perm Loans for Texas Developers Commercial Development Financing Construction vs. Mini‑Perm Loans The complete guide for Texas developers choosing the right financing structure […]
June 19, 2025

Benefits of SBA Loans for Small Business Owners in Texas

Benefits of SBA Loans for Small Business Owners in Texas Benefits of SBA Loans for Small Business Owners in Texas Unlock your business potential with SBA […]
June 16, 2025

Everything You Need to Know About CMBS Loans in Texas

Everything You Need to Know About CMBS Loans in Texas Everything You Need to Know About CMBS Loans in Texas Unlock powerful commercial real estate financing […]
June 9, 2025

How to Qualify for an SBA 504 Loan in Dallas

How to Qualify for an SBA 504 Loan in Dallas SBA 504 Loan Program How to Qualify for an SBA 504 Loan in Dallas Your complete […]
June 2, 2025

Understanding Bridge Loans for Commercial Real Estate in Texas

Understanding Bridge Loans for Commercial Real Estate in Texas Bridge Loans for Texas Commercial Real Estate Fast, flexible financing solutions for savvy investors In the fast-paced […]
May 29, 2025
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Unlock Your Property’s Potential with a Commercial Cash-Out Refinance in Texas

Unlock Your Property’s Potential with a Commercial Cash-Out Refinance in Texas A commercial cash-out refinance in Texas empowers property owners to tap into their commercial real estate equity, […]
February 28, 2025
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Understanding Loan-to-Value (LTV) for Commercial Cash-Out Refinancing

Understanding Loan-to-Value (LTV) for Commercial Cash-Out Refinancing Loan-to-Value (LTV) ratio is a critical metric in the realm of commercial cash-out refinancing. It represents the ratio of […]
February 3, 2025
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Key Differences Between Commercial and Residential Cash-Out Refinancing

Maximizing Loan-to-Value in Texas Commercial Cash-Out Refinancing What is Loan-to-Value (LTV) in Commercial Cash-Out Refinancing? Loan-to-Value (LTV) is a key metric lenders use to determine how […]

Texas commercial cash-out loans allow businesses to refinance their existing commercial real estate loans to access the equity built up in the property. Here’s how they typically work:

Loan Purpose:
These loans are utilized by businesses to extract equity from commercial properties. This equity can be used for various business needs such as expansion, buying new equipment, paying off debts, or as working capital.
Eligibility and Requirements:
Equity: Businesses need to have sufficient equity in the property, generally at least 30% to 40%. The Loan-to-Value (LTV) ratio is often capped at 75% for cash-out refinances, meaning if a property is appraised at $1,000,000, the maximum loan could be up to $750,000, provided there’s enough equity after paying off the existing mortgage.
Business Documentation: Detailed financials including balance sheets, income statements, business plans, and sometimes personal guarantees from business owners are required.
Stated income loans are available with a fixed 30 year term. Many businesses utilize them.
Property Use: The property must be commercial in nature, and the loan rules might differ if the property has an agricultural exemption or other specific uses.
Loan Process:
Application: A business applies for the loan with documentation proving the value of the property, business financial health, and purpose of the cash-out.
Appraisal: An appraisal or evaluation of the property establishes its current market value, determining how much equity can be accessed.
Underwriting: Lenders assess the business’s ability to repay, looking at cash flow, creditworthiness, and other financial metrics.
Closing: After approval, the closing involves paying off the existing mortgage with the new loan, and the remaining cash is given to the business.
Texas Specific Regulations:
Waiting Period: There’s no requirement in Texas for a 12-day waiting period from application to closing like on cash-out transactions on primary residences, which might apply to commercial properties as well depending on lender interpretations.
LTV Limits: Texas law limits the LTV for cash-out refinances, generally to 80% for primary residences, but commercial properties have different limits based on lender policies usually around 70-75% LTV.
Use of Funds: Unlike residential cash-out refinances, there are fewer restrictions on how commercial cash-out funds are spent.
Advantages:
Flexibility: Businesses can use the funds for any purpose beneficial to their operations.
No Restrictions on Usage: Commercial cash-out refinances often don’t have the same restrictions on fund usage as residential loans.
Considerations:
Interest Rates: They are almost the same as residential rates.
Prepayment Penalties: Some commercial loans have prepayment penalties if the loan is paid off early.
Collateral: The property itself serves as collateral, but additional collateral might be required.

If you’re considering such a loan, it’s essential to consult with financial advisors or mortgage brokers familiar with Texas commercial lending laws for tailored advice. Remember, while the process has similarities to residential cash-out refinances, commercial loans can have distinct features and regulatory considerations.

For more detailed information on how these loans work, you might refer to sources like www.CommercialLoansOfTexas.com or other financial institutions in Texas that specialize in commercial real estate financing. For example, you can look into their offerings for insights on loan structures, rates, and terms.