F&M Bank has a long history in the Shenandoah Valley and that experience informs the financial services and solutions we offer today. Our longtime presence in local communities has made us a trusted local bank for the people and businesses of Augusta, Page, Rockingham, and Shenandoah counties.

When you need a commercial land loan to start or expand your business, F&M offers expertise on the local commercial real estate expertise, lending decisions that are made locally, and loan terms and rates that are competitive and often more flexible than bigger banks.

What are commercial land loans?

As the name suggests, commercial land loans provide funding for the purchase of land, both raw and improved, but that isn’t all. Businesses also use commercial real estate financing to acquire other types of business-related properties such as retail or office space, residential rental buildings, and hotels. Commercial land loans can also be used by agriculture businesses, as well as F&M’s Agriculture Real Estate Financing.

Here’s what you can expect from a commercial real estate development loan:

  • The loan will finance up to a certain percentage of the total amount needed at closing, which may include some or all of the following additional fees and costs (depending on the type of property and loan terms): an appraisal, inspection, environmental assessment, title insurance, and other legal and administrative costs.
  • This means you’ll need to come to the table with a down payment, which will typically be 20-30 percent of the purchase price (again, the exact figure will vary by property and loan terms).
  • Commercial land and construction loans are generally written as term loans, which means you’ll re-pay the loan in consistent monthly installments for a predetermined amount of time. However, some commercial land loans come with a flexible repayment period and others are structured as balloon loans, which will require a larger final payment or can be refinanced.
  • Your commercial land loan will generally need to be secured by owner-occupied commercial real estate.
  • Some businesses use SBA-504 loans to supplement a commercial land loan.

Is a commercial land loan right for your business? As you analyze your business’s financial situation, make sure you can expect to have enough cash flow to repay your loan after you add the monthly payment to your existing day-to-day operational expenses.

What can commercial land loans be used for?

Owning a business is an exciting journey that begins with your first sale or client. After that, the only limit on growth is the amount of effort and other resources you invest. Taking out a commercial land loan is a sign that your business is growing. You might be ready to own your own storefront or office space, in which case you’ll trade a rent payment for a commercial property mortgage payment. As the value of your property rises, you’ll have extra capital to use or invest. If you’re in the real estate business, you may be ready to expand your portfolio from single occupancy rental units to a multi-family apartment building. Still other types of enterprises, such as restaurants, may grow from one location to two or more.

Contact our lending team today

Wherever you’re headed in life and business, F&M wants to help you get there. As a trusted community bank, we understand local business like no one else, and we also believe that one business’s success contributes to the success of the entire business community. Call us today to discuss your business goals and find out how a commercial land loan can help you reach them.

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