Questions we get asked

Most conventional commercial loans close in 35 to 45 days, provided the required information is complete at the time of application. Incomplete files are the single biggest cause of delay — every missing document adds days.

On some requests a rush fee can shorten that to roughly 30 days. Bridge and hard money loans move faster still, typically 14 to 21 days, because they are underwritten against the property rather than a full financial history.

Yes. Guardian Commercial Lending lends in all 50 states. Our office is in Sandy, Utah, but the property can be anywhere in the country.

Nothing. There is no application fee and no credit pull to have an initial conversation about your deal. Third-party costs such as appraisal, environmental reports and legal work come later in the process, and we will tell you what they are before you commit to them.

It varies by loan type, but for an income-producing property expect to provide a rent roll, operating statements for the property, a personal financial statement, recent tax returns, and the purchase contract if you are buying. For construction, add plans, a budget and your contractor's details.

You do not need any of it to start a conversation. It is only needed once we are taking the file to lenders.

Yes. We work with lenders who accept B, C and D credit and with asset-based programs that underwrite against real estate equity rather than credit history. The terms differ from bank pricing — that is the trade-off — but a low score on its own is not a reason we cannot help.

A lockout provision penalizes prepayment during a specified period. These provisions carry a strong financial penalty for paying the loan off early, and exist to protect the yield expectations of the investors who bought the loan.

Yield maintenance lets a borrower prepay without reducing the lender's expected interest income. The penalty is the value of the remaining payments multiplied by the percentage difference between the interest rate on the loan and the current yield on treasury bills of the same maturity.

In practice: when rates have fallen since you closed, yield maintenance is expensive. When rates have risen, it can cost very little.

Defeasance is a process where the borrower replaces the collateral in the original loan with substitute collateral — U.S. Treasury securities are the preferred form.

A third-party specialist determines how much replacement collateral is needed so that the security holders relying on the loan's predictable repayment do not lose value. Accountants and attorneys are involved to confirm the defeasance agreement is both financially adequate and legally valid. It is more involved than a simple prepayment, and it is worth budgeting for the professional fees.

A recourse loan is guaranteed by the borrower personally — if the property does not cover the debt, the lender can pursue your other assets.

A non-recourse loan is made to a separate entity formed to hold the property, such as an LLC or corporation. If the loan defaults, the mortgage holder takes control of that entity and the property inside it, rather than coming after you personally. Non-recourse loans almost always carry carve-outs for fraud, misrepresentation and similar conduct.

NOI is the property's gross rent or income less its operating expenses. It excludes debt service, capital expenditure, depreciation and income tax. It is the number nearly every commercial underwriting decision is built on.

Annual debt service is the monthly principal and interest payment multiplied by twelve. Taxes and insurance are not included in ADS.

Lenders compare it to NOI to get the debt service coverage ratio — NOI divided by ADS. A ratio of 1.25 means the property produces 25% more income than the loan payments require.

The capitalization rate measures the rate of return on a property. Divide the NOI by the purchase price and you have the cap rate. Rearranged, NOI divided by the cap rate gives you value — which is how commercial property is appraised, and why increasing NOI by a dollar can raise the building's value by considerably more.