How Much Can You Borrow?

One of the first steps in obtaining a loan is to determine how much money you can borrow. In the case of refinancing or purchasing a commercial property, you should determine how much you can afford. You should do this before you begin your commercial property search. By answering a few simple questions, we will calculate your buying power, based on our standard lender criterion.

LTV and Debt-to-Income Ratios:

The Loan-To-Value (LTV) ratio is the maximum amount of exposure that a lender is willing to accept. Lenders are usually prepared to lend a higher percentage of the value to creditworthy borrowers. Commercial lenders build in “safety nets” for themselves. For example, most lenders will use a specific Debt Service Coverage Ratio (“DSCR” or “DSC”) for each commercial property type.

Net Operating Income (NOI):

Typically, the Net Operating Income (NOI) of the subject property is based on the most recent twelve month operating statement. The trailing twelve (T12), is the document used for this. You then take your NOI and divide it by a DSCR of say 1.25%. This ratio helps protect the commercial lender in the event there is a decline in the subject property income. The higher the DSCR a lender uses, the lower the loan amount they will ultimately lend on the subject property. Consequently, the safer the loan is for the lender. Typical DSCRs can range from as low as 1.00% up to 1.55% with the average being around 1.25%. This is true for Multifamily properties (apartment buildings of 5+ units). The required DSCR is typically higher for office buildings, retail, and other commercial real estate market segments.

Commercial Underwriting:

A commercial lender underwrites the subject property’s income and expenses. They will also underwrite the income and expenses of the borrower(s)/guarantor(s) as well. Another consideration in approving the maximum amount of loan for a particular borrower is the ratio of monthly debt payments (such as auto and personal loans) to income. Many commercial lenders will now utilize what is known as a “global underwriting.” The commercial lender underwrites the borrower as carefully and as strictly as they do the subject property. The funding source will calculate the borrower’s debt in combination with the subject property’s debt.

Borrowers with personal, high debt-to-income ratios may need to pay a higher down payment or bring in additional equity. This could be one of the requirements in order to qualify for the loan. It is also possible that a borrower/guarantor may need to pay down, or possibly pay off in full other debts. These could include any personal revolving debt or personal car loans if their personal debt-to-income ratio is too high.

Credit Scores & Midscores:

Credit cores reflect credit risk of the individual in comparison with that of general population. It is based on a number of factors including past payment history, total amount of borrowing, length of credit history, searches for new credit (aka credit report inquiries), and type of credit established. When you begin shopping around for some type of new credit whether it is for a new credit card, a new car loan, a new mortgage on a residence, or a new commercial mortgage for a commercial property, that credit entity/lender runs your credit report which can lower your credit score a little bit each and every time it is run. Therefore, it is advisable that you authorize the mortgage professional to run your credit report only after you have chosen to apply for a loan through them.

Midscores are the middle credit score, not the average credit score, of a borrower’s three major, credit bureau scores on their personal credit report. Midscores are used by virtually all commercial mortgage lenders in their credit decisions. It is a quantified measure of credit worthiness of an individual. For example, if a borrower has a 700 Experian(TM) score, a 735 TransUnion® score, and an 810 Equifax® score, their Midscore is a 735. The lender essentially throws out the high and low scores and really only looks at the middle score, again, not the average as one would think, but the middle!


Eric D.
Pleasure to work with and extremely knowledgeable

Ronny was a pleasure to work with and is extremely knowledgeable. His hard work was never ending until the job was done. They handled a complex lease and guided us through entire process, including the paperwork. Not to mention a below market lease rate and more than all the features we needed in a site. We later used Assets America for a unique equipment financing deal where once again Ronny and team exceeded our expectations and our timeline. Thank you to Assets America for your highly professional service!

exp MFGroup
Great experience with Assets America

Great experience with Assets America. Fast turn around. Had a lender in place in 30 minutes looking to do the deal. Totally amazing. Highly recommend them to anyone looking for financing. Ronny is fantastic. Give them a call if the deal makes sense they can get it funded. Referring all our clients.

William P.
Assets America guided us every step of the way

Assets America guided us every step of the way in finding and leasing our large industrial building with attached offices. They handled all of the complex lease negotiations and contractual paperwork. Ultimately, we received exactly the space we needed along with a lower than market per square foot pricing, lease length and end of term options we requested. In addition to the real estate lease, Assets America utilized their decades-long financial expertise to negotiate fantastic rates and terms on our large and very unique multimillion dollar equipment purchase/lease. We were thankful for how promptly and consistently they kept us informed and up to date on each step of our journey. They were always available to answer each and every one of our questions. Overall, they provided my team with a fantastic and highly professional service!

Bob B.
The company is very capable, I would recommend Assets America

Assets America was responsible for arranging financing for two of my multi million dollar commercial projects. At the time of financing, it was extremely difficult to obtain bank financing for commercial real estate. Not only was Assets America successful, they were able to obtain an interest rate lower than going rates. The company is very capable, I would recommend Assets America to any company requiring commercial financing.

Ricardo L.
Assets America was incredibly helpful and professional

Assets America was incredibly helpful and professional in assisting us in purchasing our property. It was great to have such knowledgeable and super-experienced, licensed pros in our corner, pros upon which we could fully rely. They helped and successfully guided us to beat out 9 other competing offers! They were excellent at communicating with us at all times and they were extremely responsive. Having them on our team meant that we could always receive truthful, timely and accurate answers to our questions. We would most definitely utilize their services again and again for all of our real estate needs.

Assets America is a great company to work with

Assets America is a great company to work with. No hassles. Recommend them to everyone. Professional, fast response time and definitely gets the job done.

DAC Team
Great experience

Ronny at Assets America has been invaluable to us and definitely is tops in his field. Great experience. Would refer them to all our business associates.

MF Group
We were very pleased with Assets America’s expertise

We were very pleased with Assets America’s expertise and prompt response to our inquiry. They were very straight forward with us and helped a great deal. We referred them to all our business associates.

Manny C.
Worked with this company for decades

I’ve worked with this company for decades. They are reputable, knowledgeable, and ethical with proven results. I highly recommend them to anyone needing commercial financing.

David B.
Top-notch professional

Ronny was incredibly adept and responsive – top-notch professional who arranged impressive term sheets.

Monte M.
Assets America helped us survive a very difficult time

Assets America helped us survive a very difficult time and we most definitely give them 5 stars!

Brent G.
Gave me direction to go

Ronny was very friendly and though we were unable to make something happen at the moment he gave me some direction to go.

Allan E.
Highly recommend them for any type of commercial financing

My business partner and I were looking to purchase a retail shopping center in southern California.  We sought out the services of Ronny, CFO of Assets America.  Ronny found us several commercial properties which met our desired needs.  We chose the property we liked best, and Ronny went to work. He negotiated very aggressively on our behalf. We came to terms with the Seller, entered into a purchase agreement and opened escrow.  Additionally, we needed 80 percent financing on our multimillion-dollar purchase.  Assets America also handled the commercial loan for us.  They were our One-Stop-Shop. They obtained fantastic, low, fixed rate insurance money for us.  So, Assets America handled both the sale and the loan for us and successfully closed our escrow within the time frame stated in the purchase agreement.  Ronny did and performed exactly as he said he would. Ronny and his company are true professionals.  In this day and age, it’s especially rare and wonderful to work with a person who actually does what he says he will do.  We recommend them to anyone needing any type of commercial real estate transaction and we further highly recommend them for any type of commercial financing.  They were diligent and forthright on both accounts and brought our deal to a successful closing.