Browse Forums Home Finance Re: Commercial loan and line fees 7May 28, 2013 9:45 am I don't think that you would get a blended loan for a warehouse as the loan is for a warehouse not residential. The collateral could be a mix of several items. Stig is correct. The line fee is simply a charge that helps recoup the capital that the bank must hold to cover the undrawn piece of the facility. From a capital perspective credit lines are off balance sheet assets which have a credit conversion factor applied to give it an equivalent on-balance sheet value to which capital would be charged. BTW unless the bank is operating under basel 3 and uses advanced models for their capital only cash collateral reduces the capital as real estate does not qualify for capital reductions. For the rates charged you should add it all up to see what it comes to and also don't forget that there may also be facility fees which are charged on a revolving basis, check the tenor of the loan. Then compare to other banks regarding whether the loan is commercial or residential, again Stig is on the money. It is tied to the main collateral which would be the commercial property. Other collateral is given to bring the LTV down. Be careful about what you use the money for, unless you can show that it has been used for income producing activity. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19096 Is it just a report written to give to the bank initially and it is based on what and how your payments are made up for, or is it a full service where they go out and… 2 5599 0 19345 |