Raising Capital for Commercial Real Estate

To generate capital for your real estate project, it pays big dividends to do your homework. Learn about raising capital for your project.

Raising Capital Fundamentals
Estimating Costs
Capital for Growth
Debit Financing
700 Business Lenders
Understanding Financial Statements

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Raising Capital Fundamentals

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In what state of development is the project? Needs are most critical during transitional stages. For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs. How strong is your management team? Management is the most important element assessed by money sources.

Perhaps most importantly, how does your need for financing mesh with your business plan? If you don't have a business plan, make writing one your first priority.

Estimating Costs for commercial development

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In order to determine how much money you will need, you must estimate the costs of your project for at least the first several months and usually much longer. Every project is different, and has its own specific cash needs at different stages of development, so there is no universal method for estimating your startup costs.

Some projects can be started on a shoestring budget, while others may require considerable investment in inventory or equipment. It is vitally important to know that you will have enough money to complete your venture successfully.

To determine your soft costs, you must identify all the expenses that your project will incur during its startup phase. Some of these expenses will be one-time costs such as the fee for obtaining permits, engineering, infrastructure, and construction costs. Some will be ongoing, such as the cost of utilities, inventory, insurance, etc.

While identifying these costs, decide whether they are essential or optional. A realistic budget should include everything necessary to complete your project.

The most effective way to calculate your startup costs is to use a worksheet that lists all the various categories of costs (both one-time and ongoing) that you will need to estimate a successful project.

Capital for Growth

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Venture Solutions helps businesses in a growth mode obtain the capital they need to reach their financial goals. This type of leveraged financial situation involves all the activities that enable a company to allocate resources efficiently, maximize the income potential of the business activity and monitor results through accounting documents.

Such situations require a well-written, comprehensive financial management plan clearly outlining the assets, debts and the current and future profit potential of your business.

Debt financing

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A creditor agrees to lend money to a debtor in exchange for repayment, with accumulated interest, at some future date. The creditor does not obtain any ownership claim in the debtor's business. Debt financing is attractive because you do not have to sacrifice any ownership interests in your business, interest on the loan is deductible, and the financing cost is a relatively fixed expense.

Commercial Real Estate lenders

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The best way to borrow money for commercial real estate projects is to apply directly to the creditors that specialize in what you need.

Submit an application to over 700 direct lenders.

Understanding financial statements

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Understanding financial statements is critically important to the success of any project.

Financial statements can be used as a roadmap on your business journey to economic success. Using numbers as navigation aids can steer you in the right direction and help you avoid costly breakdowns. Most property owners don't realize that financial statements have a value that goes far beyond their use to prepare tax returns or loan applications.