Loan-to-Value Ratio (LTV) is an important factor that lenders consider when deciding whether to approve a loan. Generally, the higher the LTV, the riskier the loan is for the lender. This is because there is less equity in the property that can be recovered if the borrower defaults. Small business owners may prefer high LTV loans, as they can purchase a property with less money down, freeing up their valuable cash for other investment opportunities.
For more information, please see Loan-to-Value Ratio Calculator and LTV: Loan to Value in Relation to HUD 223f Loans.