Small business / commercial loan.
I’m currently going through culinary school and look to open my own alehouse shortly after completion. The area in Texas where i live isn’t terribly expensive, but land owners are selling land at pretty high prices. For instance, the plot i want is 2.4 acres on a service road by the freeway in a booming area. It is for sale for 664K, so for that, the build and all the stuff going into it (not including all the certificates and such) i’m looking at approximately 875K. That seems pretty high for a restaurant (small business) to get as far as a loan. If i was to build an alehouse, could i use the loan to also get the certificates (alcohol and liquor sale-serve), the land and the build done? If so thats around 890K… If thats a possibility, whats the overall monthly payment for 890K on a 20 year fixed CDC (from what i read the cdc loan is one i’d use)? If you have dealt with this type of situation before, whats my best course?
The use of your loan proceeds depends on what type of loan you get. If you’re getting a strict real estate loan then you may be restricted to a certain percentage of the cost and value of the property. You won’t have any funds left over to use for anything else. They also restrict you, in many cases, from spending the funds that way. However, if you get a working capital loan then you can use the funds for any business expense.
For your needs you likely will need both a loan for your real estate and a loan for your working capital needs. You’ll need a down payment for the real estate portion. You can read our article to learn more about the types of commercial real estate loans.
You can also calculate an estimate of what your payments might be by trying out our commercial loan calculator.