How long does it typically take to close on a commercial loan?

In business, time often equals money. Companies are often motivated to quickly close on the commercial properties that they want to buy because the sooner that they do, the sooner that it is that they can start generating much-needed cash to begin paying off their investment. This is perhaps one of the reasons that Florida business owners ask how long it will take to close on their commercial loans.

There’s no one single answer to this question, but a study published by Sageworks in 2017, did capture how long it took 171 banks that were polled to close commercial loans that year. On average it took 44 days. Only four percent took as low as 13 days or less. Eleven percent required 57 days or more.

The researchers also found that the larger the loan was, the more time it tended to take to close on the commercial loan. They found that one as small as $150,000 may result in delayed processing. In some instances, researchers found that loans smaller than $200,000 took as long as 120 days to eventually close.

Commercial and industrial loans also generally take an additional 15 days longer to close than other types. In contrast, credit lines generally close much quicker than commercial loans do, regardless of the dollar amounts involved.

Researchers also identified how banks who utilize a parallel closing process, which includes having appraisals done while underwriting is being done (as opposed to after it), close two times faster than those who use a linear approach instead.

Closing times have greatly improved over the past few years, especially if you consider how it generally took up to 90 days to close on a $500,000 loan in the past. A commercial property closings attorney can advise you what to expect during the loan closing process — and how you may be able to expedite things so that you can get back to focusing solely on growing your company.