How to get a Warehouse Loan
When it comes to buying a warehouse getting a loan is a similar process to other types of commercial lending. In terms of commercial security on a loan, a warehouse is viewed as a standard commercial property.
As with other commercial property loans, commercial lenders will generally require your profit (EBITDA) to be at least 1.5x the total interest costs for investment purposes and 1.25x for owner occupied (used for your own business) for warehouse loans.
Therefore the application process to own a warehouse is not considered a complex security type and is viewed similar to a commercial property loan.
Warehouse Loan Lines of Credit
An alternative type of finance to a warehouse loan can be a line of credit with the warehouse as security. A warehouse line of credit, differs from a loan as it gives you funding up to a predetermined limit and you only pay interest on the funds drawn down.
It is best to speak with your local Mortgage Choice broker to understand what type of commercial lending is best for you when it comes to buying a warehouse.