Is it possible to get conventional financing (no balloon payment) on a commercial property through a bank?

I spoke to a few people at banks. No one has a straight answer. The most experienced and credible banker whom I spoke with stated that the bank that she works for does not offer conventional financing (straight amortization, no balloon payment). Another banker stated that they offer 20 years of straight amortization for commercial property. But the website shows only balloon type loans with a maximum of 15 years. So far, I am concluding that conventional financing is not available. But if it is available, then the maximum term is 15 years. Any insight will be helpful. Thank you.
In Buying Property - Asked by John S. - Sep 19, 2015
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Chris R.
Denton, TX

Yes. Just keep searching for a local bank. Will partly depend on the quality of the asset, condition, location, size, type, price, etc., creditworthiness of the buyer, how much they are able / willing to put down, if they have any other properties like kind, etc., etc. but a local bank in the area of the property likely the best option.

Sep 24, 2015
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John S.
Lender/Mortgage Broker
Buffalo, NY

Many lenders offer 'conventional' financing. The difference between the loan Term and Amortization will determine if there is balloon payment or not. Commercial property loans can have amortizations as long as 20-30 years (sometimes longer) or may even be interest-only (with no principal repayment)
But may banks will not offer 20-30 year loans, and if they do, may only lock your interest rate for 5,7, or 10 years. Many of our Life Insurance lenders offer 10-20 year fixed-rate loans with amortizations from 10-30 years. So a 10-yr loan with a 10-yr amortization will be what is called "fully amortizing" and have no balloon at maturity (as would a 20/20 loan). Conservative investors typically prefer lower risk, protecting equity, low LTV and shorter amortizations. More aggressive investors are more comfortable with risk, and to generate higher returns, need higher leverage and longer amortizations. Lenders price risk and will generally give more-conservative investors the best rates and terms. Hope this helps. John Svec, Largo Capital, 716-204-2221

Sep 25, 2015
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Francis L.
Santa Clarita, CA

Contact a local bank that's only doing business in your immediate area/country. They might consider it, depending on how much business you do in the area, etc. Let them know you'll consider transferring all you business banking to their bank, as well. Small, local banks, and their VP's have "power of the pen". I call them "good old boy" banks. I've seen special considerations done in the past, based on personal relationships and history with the bank and the local business community. It's worth a try...if you don't ask, you don't get!

Sep 25, 2015
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