Essential Funding Solutions
Real Estate Investor and Small Business

September Funding

Essencap successfully closed a $5,100,000 commercial real estate refinancing loan. The subject is a 88,000-square foot, three-story, suburban office and retail building located in Glastonbury, Connecticut. The improvements were constructed in 1973, renovated in 2017 and are situated on a 4.22-acre site.

We are pleased to announce that Essencap successfully arranged a commercial real estate loan. The loan assists our client to refinance a bridge loan into a low rate stabilized real estate loan. We are honored to represent our client with this architectural gem. The building was rewarded with AIA Design Award, Honorable Mention, Connecticut Chapter. 


Most important ratio in
Commercial Real Estate Financing
Debt service coverage ratio, or DSCR, compares a property’s annual net operating income (NOI) to its annual debt obligation. Based on the DSCR, a lender can determine whether a project is taking in enough operating income to cover its debts. DSCR is one of the most important ratio when comes to real estate financing. 

DSCR = Net Operating Income / Debt Payment.

A debt service coverage ratio of 1 means a property is generating enough income to cover the debt obligation, while DSCR of less than 1 means it is not. Hence, commercial lenders would require a property to have a DSCR higher than 1 to ensure the income is sufficiently higher than the debt payment to avoid shortfall. It’s important to realize that DSCR may change with non-cash flow item of the loan terms, such as deperication, or one time expenses. 

The general requirement of commercial mortgages is a 1.25x DSCR. Please note, this number fluctuates depending on who the lender is, the property type, the submarket, amortization, and other factors. 
Read More
Copyright © 2018 Essencap Funding LLC, All rights reserved.

Our mailing address is:

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.


This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Essencap Funding LLC · 45 Middle Neck Rd Ste 220 · Great Neck, NY 11023-2124 · USA

Email Marketing Powered by Mailchimp