What is a warehouse loan?
Warehouse loans are a specific type of commercial financing for industrial facilities. Lenders offer warehouse mortgages for a variety of scenarios, such as purchase, acquisition and development, refinance, and cash-out refinance. Many kinds of warehouses exist and can be covered by such a loan, including light industrial warehouses, cold storage warehouses, railway warehouses, retail warehouses and wholesale distribution centers. Banks, credit unions and non-bank lenders offer warehouse mortgage financing for borrowers. A borrower can get a purchase mortgage for a warehouse with 10% down and cash-out refinancing is available for expansion and may be at 100% LTC. Warehouse mortgages can be acquired quickly, with LTVs of 50% to 75%. Warehouse construction loans are also available if a borrower is planning to build a new warehouse facility. You can use Scotsman Guide’s Lender Search to find the right lender for your borrower’s construction project.
Warehouse financing can be used for the following purposes:
- Purchase
- Refinance
- Refinance to get cash out of the property
- Acquisition and development
- Construct or build one
- Rehab and/or remodel
What are some common types of warehouse loans?
- 75% LTV starting at 8%, closing in 5 days
- SBA 7(a)
- SBA 504
- USDA B & I
- 65% LTV, 3-year term, no credit score, no prepayment penalty
- $80,000 to $20,000,000
- Conventional financing up to 85% LTV
- Stated income, light doc up to 75% LTV
- Full documentation SBA up to 150% LT
- Bridge loan
- Stabilized and non-stabilized properties
- Funding in 5 to 7 days after LOI
- 7-year term with 25-year amortization
- Short term, equity only bridge loan
- Construction loan
- Rehab/remodel
- Expansion
How do I get financing for a warehouse?
Private lenders, banks, credit unions and hard money lenders accept applications for warehouse financing. Applicants may be required to submit full documentation of the property and themselves, as well as have an appraisal done in order to obtain the lowest interest rate. Borrowers that need their warehouse loan to close quickly should consider no- or low-documentation loans, based upon the equity they have in the property. These loans typically offer LTVs around 55-65% and can close within two weeks. Warehouse mortgage financing often takes the first position lien, though some lenders offer second mortgages as a way for borrowers to get capital that can be used to improve the property through expansion, remodels, landscaping or other projects.
Enter your client’s loan scenario into Lender Search for a list of lenders that can fund the mortgage. Click the Contact button within a lender listing to send them the particulars you searched, as well as your contact information. The lender will contact you to discuss the loan.
If you’re an owner or manager of a warehouse you might want to find a commercial mortgage broker to assist you. The lenders that appear in Scotsman Guide’s Lender Search work directly with mortgage brokers to fund loans for their clients.
What is a warehouse hard money loan?
Hard money loans for warehouses are funded by non-banks and private lenders. They offer benefits, such as fast funding, less documentation and the flexibility to accommodate borrowers with bad credit and non-conventional situations. However, they do offer higher interest rates than conventional loans, lower LTVs and typically feature shorter repayment periods. Warehouse hard money lenders can work with borrowers that have FICO scores as low as 500 and may accept bank statements to prove the borrower’s ability to repay the loan instead of tax returns. Hard money loans are equity based and offer LTVs of 50% to 65%.
Which lenders offer financing for warehouses?
Financing for warehouses is offered by dozens of banks, private lenders and non-banks. Our Lender Search can be used to find all of the lenders in our database that can fund your clients’ specific loan request.
