Board Topic: Do I need to get a commercial loan? Commercial vs conventional
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Do I need to get a commercial loan?

Posted by: lilly Feb 21 2004, 06:12 PM
I am looking into buying an existing home which I would like to put a gift shop in. There is no existing business there and I am not buying anyones business. I will be starting up the business myself. My question is this. The property is $125,000 and I have approx $25,000 to put down. Do I need to get a commercial loan to purchase this property or can I get a conventional loan? So basically what I am saying is that I do not need to borrow any money to start the business, I have that money, all I need is to borrow money to buy the property. So does that loan need to be a commercial loan? Or can go with a conventional loan?

Posted by: loanuniverse Feb 21 2004, 11:17 PM

I am not a residential lender and can not tell you whether or not you can get the ”conventional” residential mortgage. I think it might be possible, but a residential lending officer should be able to help you on that. I do have a couple of thoughts on your situation:

1 - You are not buying a business, but have you planned how you are going to start it? Putting it in “black and white” in a formal business plan even if it is just to get a working framework for yourself would bbe useful.

2 - Will you be able to run a business in the house? How is the zoning?

3 - By your post, I conclude that you have other funds for the business operations. Make sure that these funds are enough…. This is why the business plan is important.

4 - A residential loan usually has an occupancy clause. ”As in you must live in the house” you should ask about this.


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