Do Banks Use a Formula When Lending on Commercial Property?

Getting the Money you need for your Loan

BANKS have a variety of ways of analysing a Commercial property; but there are a few guidelines they all tend to use.

For them, the most important number is the property’s Net Operating Income — which is basically rental minus expenses. As simple as that may seem, the calculation can vary dramatically from lender to lender.

Calculating the Net Operating Income is fairly straightforward. [Read more…]