Cornerstone Bank has been in the Overland Park community for over 19 years. During that time, we’ve learned a lot about what it means to provide true customer service when it comes to our business customers and providing commercial loans.
In Kansas City alone, we have heard stories from our clients of working with big banks that take a month or more to close a commercial loan, and some instances where those loans fall through after all of that trouble!
Being locally owned, Cornerstone Bank is able to provide nimble and quick service to our commercial customers, closing their loans in a timely and convenient manner to keep their business running smoothly.
Commercial Banking at Cornerstone Bank
Commercial banking is a specialty at Cornerstone Bank. We serve a variety of small, medium, and large businesses in the community and surrounding areas. One of the best parts? We work with businesses of all kinds, meaning we get to learn new information and serve new industries every day 😀
This has provided our team with a diverse knowledge set that allows us to process high levels of information and make well-planned and executed recommendations for our clients.
We serve businesses in industries like:
Landscaping
Construction
Medical Practices
Dentist Offices
Transportation
Leasing
IT
Retail
& More
Through that time and experience, we have become the local experts when it comes to commercial loans in Kansas City. We’ll share the most important tid-bits below.
If you ever have any questions about commercial loans, please don’t hesitate to contact us for additional information and/or personalized help and recommendations!
Read on to learn more about commercial loans from Cornerstone Bank.
Types of Commercial Loans in Kansas City
Want to learn more about commercial loans? Hear from our commercial loan officer, John V. Doull, who has been with Cornerstone since 2007.
Before we discuss commercial real estate loans, let’s talk about all of the various commercial loans available in Kansas City.
Types of Commercial Loans
While the idea of a “loan” may seem pretty cut and dry (you borrow money from a bank and pay it back with interest), it’s actually very important to understand the exact type of commercial loan you’re looking for. This will help you shop for the best interest rates, understand your payment terms, and build a trusting relationship with your bank.
1. Commercial Real Estate Loans
There are two subtypes of commercial real estate loans: owner-occupied and non-owner-occupied. We’ll discuss each more in-depth later.
2. Business Lines of Credit
Business credit lines often offer affordable monthly payments and do not charge fees for paying off your balance early. This means you can use your credit as necessary while business is slow, then pay it off when business picks up. If your business could use a steady, reliable source of funds for inventory needs, growth, or seasonality, a business credit line may be the best choice for you.
3. Equipment Loans
Equipment loans are basically self-explanatory. The bank funds a purchase for you in order to help you grow your business at a faster rate than if you were to wait and save for that purchase organically. For example, if you own a landscaping company and you need to purchase lawn mowers or other landscaping equipment to expand your reach, banks can help finance these investments and help you make more money sooner!
4. Investment Properties
Technically, applying for a loan for an investment property is considered a commercial loan, as this implies you will intend to partake in some form of commerce with the property (whether you’re renting it, flipping it, or both).
“Should I buy or lease my commercial space?” More on Commercial Real Estate Loans
Overall, commercial Loans can be a great tool to grow your business. And while there are a variety of types of commercial loans, one of the most common questions our loan officers receive from local business owners is whether or not they should buy their commercial space.
Cornerstone Bank wants our community to be as informed as possible in making important financial decisions for their personal and business needs. Read on to learn about the pros and cons of taking out a commercial real estate loan in Kansas City.
The Benefits of Commercial Real Estate Loans
There are two different types of commercial real estate loans: owner occupied and non-owner occupied. We’ll focus primary on the former.
Owner-Occupied Commercial Real Estate Loans
An owner-occupied commercial real estate loan will enable your business to begin operating out of a space you own. Depending on the function of your business, this could include warehouses, office spaces, retail space, industrial buildings, or something else.
It can be a very smart business strategy to decide to purchase your work space instead of leasing it from someone else. It’s the same principle as renting a car or leasing a house; yes, you can use that space for a time, but what are you left with when the lease is over? What decision power do you have while you are occupying that space?
By purchasing your own commercial real estate, you will not only have the equity of a commercial building, but you will also enjoy less “overhead” costs (as paying rent to a building owner will no doubt cost you substantially more than being your own leasor). In addition, you will be the primary decision-maker of that space. No need to get permission to make renovations or changes; no middle-man needed for repairs or maintenance.
Many business owners love the opportunity to be solely responsible for their space, because it allows them the agency to decide what’s best for their space—and consequently, their business as a whole. A sense of “stewardship” for your space can bring a great sense of pride and help your business flourish long term.
Non-Owner Occupied Commercial Real Estate Loan
As the name implies, taking out a non-owner occupied commercial real estate loan means you are looking to purchase a commercial space with plans to lease that space to other tenants as an investment opportunity.
Whether it’s a single office space, a mixed-use building (with both living and retail space), or a strip center for multi-tenant use, a non-owner occupied commercial real estate loan can have a significant return on investment when managed properly.
What are the risks involved in taking out a commercial real estate loan?
Just like with any major financial decision, there are important risks to consider when deciding whether or not to take out a commercial estate loan.
Property Value
Will the property maintain its value over time and ensure you maintain equity in your space? This depends largely on the LOCATION of the space, the surrounding infrastructure, and how you maintain that space over time.
Buying v. Renting
When comparing the cost of rent versus a commercial mortgage payment alone, your decision may feel like a no-brainer. However, there are other costs associated with purchasing that you should consider when compared to renting. This includes the cost of maintaining the building itself, along with additional utilities, parking, taxes, security, etc. By taking a holistic view of your total anticipated expenditures versus savings versus earned equity, you’ll have a much better perspective to make your decision.
Interest Rates
You should pay close attention to the rates you are able to get on a commercial loan when calculating your return on investment. How much money are you able to put down on your loan? How much money do you want to have in commercial property compared to liquid assets?
Learn more about other business loans in Kansas City →
What You Should Know Before Applying for a Commercial Loan
When preparing to discuss commercial loans with your bank, be sure you have thought through your investment in its entirety. We will have a lot of questions for you to answer, but we’ll also make the process as easy, quick, and convenient as possible.
To help you feel prepared, here are a few questions or scenarios we’ll run past you:
- What is the Loan-To-Value (LTV) ratio?
- What collateral do you plan to use to secure your loan?
- Will you apply as an individual or as an entity?
- What is your credit worthiness?
- How much time do you feel you need to pay back the loan?
Read more about applying for a commercial loan →
Learn more about commercial loans from the experts
Since 2001, Cornerstone Bank has put our customers first, and that means giving them the best that mobile banking has to offer.
Cornerstone Bank services the large and flourishing community of Kansas City. While a $15,000 loan might not be important to a big bank, we understand how much of a difference that can make to a small business. You’re more than just a number to us.
Need further assistance with or have questions about commercial loans? Contact us online or via phone and we’ll be happy to help.
Next: hear from our commercial clients
Want to hear about the Cornerstone experience directly from our clients? Now’s your chance! Here, we sit down with Dr. Leslie Michaud to discuss her commercial loan experience at Cornerstone Bank.
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