Commercial Lending: Making Sure Your Needs Are Met

Getting a mortgage is an adventure. It does not matter if you are looking for a mortgage for a home or for a business venture the basic same rules apply. It is tough to enter into a large financial agreement with a lender that is often a complete stranger to you and your needs. The…

Getting a mortgage is an adventure. It does not matter if you are looking for a mortgage for a home or for a business venture the basic same rules apply. It is tough to enter into a large financial agreement with a lender that is often a complete stranger to you and your needs. The problem is that you have specific needs that your commercial lending company needs to meet in order for you to feel confident that it is the right deal for your company.

There are some basic tips you will want to follow and things to think about as you apply for commercial lending. Not only are you looking for a quality lender, low interest rate and fair terms for your loan needs. Finding this miracle lender is the tricky part and it will take time. Also, just because you have found someone do deal with your lending needs for this transaction do not assume that with every aspect of business lending that they will be your go to lender. You will need to stay up to date on your lending needs too and not quite on someone else completely.

First speak to a mortgage advisor. It is important that a party that is not invested in you or a lender look at your situation individually to advise you. A mortgage advisor is an individual who is paid to help you find a great deal on a commercial loan. Because they do not have any connection to a lender they will look for the best deal within your business sector and can also navigate better because they are professionals in the industry.

Mortgage brokers can also be useful because they often specialize in a certain type of lending such as commercial lending. They will be able to explain their specialty inside and out. They can give detailed information about lenders and different mortgages available which is all information that will benefit your lending needs.

Remember to leave yourself plenty of leeway in finding a mortgage for a commercial venture. Residential mortgages take a while and much paperwork is needed to complete them but it is nothing in comparison to a commercial loan. If you go with a mortgage broker or advisor they may be able to help streamline the process helping the speed at which your loan goes through.

It is imperative that when working with a professional broker or advisor that they are independent of a lender. This way you know they are really scoping out the industries best deal for you and not favoring a lender because of ties to that company.

It is possible to arrange for a commercial loan on your own. Be prepared for leg work and ask friends and business contacts for referrals. Often you're the financial people in your life can assist you with contacts. Your accountant, financial advisor and other business owners can be your best allies when looking into a commercial loan. Do not forget about your banking institution also. They can provide services to help you with finding a commercial loan or pointing you in the direction you should be looking.

You should use all online tools available to you. Scope out forums and blogs that will help you understand key elements and terms that lenders are throwing at you. It is important to be knowledgeable and well educated when you enter into an agreement such as one with the magnitude of a commercial loan. It will affect you and your business for years to come so make sure it is a best fit for all parties involved.

Unsecured Business Loans: Getting Your Business Up Off The Ground

You have a brilliant idea for a business, you have the manpower to begin but now how do you go about getting the funding to sustain the business till it is bringing in revenue. That is where unsecured business loans come into play. An unsecured business loan will be available to you to draw on…

You have a brilliant idea for a business, you have the manpower to begin but now how do you go about getting the funding to sustain the business till it is bringing in revenue. That is where unsecured business loans come into play. An unsecured business loan will be available to you to draw on for the needs of the business as it flourishes like an open loan agreement up to a point. Often times this type of loan is good for the start up cost involved in opening a new business such as; equipment, expansion or modifications of the existing office and advertising needs.

Going about acquiring an unsecured business loan is much like any other type of loan agreement. The major difference is that you are now required to put up any collateral to secure the advance. The great thing about this type of loan is that you are only access interest on the amount of the loan that is used. So even if the loan is for twenty five thousand dollars if you only use five thousand, interest will only occur on five thousand.

In order to receive an unsecured loan many lenders will look into your business plan and the credit history of the business. Of course, this is an issue if the business is brand new. Lenders want to ensure that they will be able to recoup the lent funds. It is imperative that your businesses credit score get established. In order to do this you will need to make sure the outstanding payments the business does have are paid on time and in full.

Establishing a good business credit score can be done by taking out small loans with multiple lenders that report to the SBFE. You can also establish a business credit history by using business credit cards and with your vendors and the lines of credit they establish for you. Just be consistent with your payments and you will find yourself well on your way to establishing a credit history worthy of an unsecured business loan.

It takes time to get a small business, or any business for that matter off the ground. With some strategic planning and a lot of hard work and a bit of luck you will be well on your way to establishing your dream. Remember when starting out when you take off do not let it go to your head. Getting too big for your britches does not make you successful in business. Work at a steady consistent pace to receive the rewards that you are working towards.

Compare Business Loans For The Best Deal

It is important to compare business loans in order to ensure that you get the best financial assistance for your enterprise. A lot of entrepreneurs are starting their own enterprise and they require finance for setting up their business. Websites Offer Details about Major Financiers There are many banks and financing companies which offer business…

It is important to compare business loans in order to ensure that you get the best financial assistance for your enterprise. A lot of entrepreneurs are starting their own enterprise and they require finance for setting up their business.

Websites Offer Details about Major Financiers

There are many banks and financing companies which offer business loans to entrepreneurs at reasonable rates of interest. The internet is a good place to search for the best financier as there are websites which compare business loans offered by different loan providers. Such websites make it easier for the entrepreneur to decide who is the best loan provider who offers loans at reasonable rates and does not have very strict terms and conditions. If you are looking for financial support for your business, then, it is advisable to check out such sites thoroughly to find the best loan provider.

The greatest advantage of these websites is that the entrepreneur can check out details of various financing companies on the same website and there is no need to search different websites to find the information. You simply have to click on a particular financier and immediately the website will display all details about it. These websites compile important information about different financiers so that entrepreneurs can conveniently check out the details of each loan provider and compare business loans offered by them. If you want specific information about a particular one, you can type the name of the Finance company in the search bar provided and immediately the website will provide all the information available about the company.

To avail this service, you will be required to register with the site as a member by giving basic details like your name and email id. Also, the service is completely free and entrepreneurs are not required to pay any fee for the information. Generally, the website gets its payment from major loan providers whose name and details are displayed on the site. Those entrepreneurs who have a previous record of bad credit can also search the website for suitable loan providers for their enterprise.

Clarify All Doubts

By providing details about different loan providers, the website makes it convenient for entrepreneurs to compare business loans on the basis of terms and conditions, time period and rate of interest for the loan. Based on the information, a businessman can decide on the best loan provider for his enterprise. If you desire any additional information about a particular financier such as the amount of Money that they specify as interest, then, you can contact the website by phone or email to get the necessary information.

These websites also provide adequate contact details of each loan provider so that the entrepreneur can contact the company directly before making the final choice. Ideally, after short listing the most suitable financiers, you should also contact the loan company to clarify any doubts about their rate of interest and repayment conditions. This is essential before you sign an agreement with the financier for the stipulated loan amount.

It is important to check out websites which compare business loans. This will help an entrepreneur decide on the best loan provider without much waste of time and energy.

Investment Property Loans: Know the Right Time to Get Investment Loans

Considering investment property loans usually bears the question whether it is the right time. Keeping in mind whether this type of investment during an economic down turn or even a recession is advisable and how it would affect your business and private wealth creation. The contrast of course, is that if you're buying while the…

Considering investment property loans usually bears the question whether it is the right time.

Keeping in mind whether this type of investment during an economic down turn or even a recession is advisable and how it would affect your business and private wealth creation. The contrast of course, is that if you're buying while the economy is doing great, the property would be much more expensive as prices are so high. Knowing the right time to invest on a property will certainly be a great advantage for any investor to make the most profit of his investment and reduce the risks.

Knowing when the right time is to invest in a property usually depends on your knowledge, about the business. It is also helpful to have a good business network that can provide more information about your plan. For example, knowing about upcoming developments in the area you're looking at would be essential to making a good decision. It would mean that you could more accurately estimate the growth of the property you want to invest in.

Investing in commercial property during an economic crisis is generally regarded as quite a risky thing to do, as people would normally hesitate to start a business when almost everyone is saving their money and not spending their funds. This would then affect the monthly rent of your commercial space and what kind of business would be interested in leasing it.

On the other hand, some investors would find this is the perfect time to invest in a commercial property as they can snap up great properties in great locations for a bargain price. This can be especially true if you have substantial capacity to invest in such property without having to worry if a tenant will be able to move in straight away. Buying a commercial property as an investment during times like this will be beneficial to an investor who has large sums of cash reserves available as they would definitely get better deals.

But if you need to get a loan to finance your property investment, what do you need to consider? You can either organize short-term finance or a bridging loan if you're looking to further develop the site or make changes to the property. Of course you can consider a bank loan, or even a loan from a private lender.

In any case, it is advisable that you consult a trusted adviser in the space of investment and commercial real estate loans to discuss how you can make the most out of your situation.

The Merchant Cash Advance: A Business Funding Opportunity for SMBs

More and more small and medium-sized businesses (SMBs) are realizing the benefits offered by the merchant cash advance. A business can obtain the working capital they need more easily with this method than with a conventional bank loan. If there is one main concern startup businesses share, it's the matter of finances. While a larger…

More and more small and medium-sized businesses (SMBs) are realizing the benefits offered by the merchant cash advance. A business can obtain the working capital they need more easily with this method than with a conventional bank loan.

If there is one main concern startup businesses share, it's the matter of finances. While a larger company can usually afford the occasional loan for their needs and pass the loan's requisites, an SMB may not fare as well. Aside from the mountains of paperwork and red tape, there are also the bank's stringent background checks that make it very difficult to get an approval for a loan.

Conventional bank loans also take time to process, which may not be ideal for the SMB that needs the cash as soon as possible. Using a merchant cash advance, business owners and up-and-coming entrepreneurs can be provided with money on demand. A good cash advance service provider can get an applicable their money – up to $ 20,000 – in as soon as three days.

This provides SMB owners with more time to use the cash according to their businesses needs, despite to restock the inventory, to pay employees on time, or to make necessary repairs to the office. Or depending on the cash can be used to make a vital, time-sensitive investment that can put the business in a superior position over its competitors. The bottom line is that in using a merchant cash advance, the business owner is able to access cash when he might need it the most.

As a point of clarification, this finance strategy is different from a bank loan. Here is how it works: The cash advance company purchases the client's future credit card sales, which is then converted to the amount of cash the client requests. From here, the company automatically deducts a set percentage from the business's credit card sales for a set time period. The key here is that as the business grows, so does its ability to repay the advance in a shorter amount of time.

This process also makes it easier for businesses to manage their account, more so if they are already swamped with their other urgent responsibilities. Any merchant cash advance company of good standing will also field a well-trained customer service team to guide their clients through the whole process, and to help them decide on a personalized, tailor-fit option that is advantageous for both parties.

A Checklist for Getting a Business Loan

Financing a new business can be frustrating for an entrepreneur, but when you finally get that business off the ground the sense of accomplishment is worth it. There are several potential sources of funding a small business owner that can gain access to, but one of the more common approaches is to seek out a…

Financing a new business can be frustrating for an entrepreneur, but when you finally get that business off the ground the sense of accomplishment is worth it. There are several potential sources of funding a small business owner that can gain access to, but one of the more common approaches is to seek out a business loan.

There is a process to getting a small business loan that requires a significant amount of preliminary work. A business owner should have his own checklist to refer to in making sure that he has everything he needs to apply for a small business loan.

Business Plan

The business plan is the business owner's way of selling his business to lenders. It includes sales and marketing plans, a list of key personnel, an estimate of costs, a projection of revenue and an estimate on how much the business will need to borrow.

Financials

A lender is not going to consider your loan application if you are not willing to share your company's financial reports. A lender will want to see your accounts payable, accounts receivable and your expenses. Your projections are found in your business plan. This information is your company's actual performance. The lender will want to see verified growth in revenue from year to year before investing in your company.

Loan Application

You can get the loan application from the bank itself or off the bank's website. Fill out as much as you can and have it ready to submit to the bank officer at your meeting. If you come across sections you are unsure of then contact the bank prior to your meeting to find out how to complete the application.

Product Model

If you are applying for financing for a start-up, then have a working model of your product to show the lender. If you are looking for funds to launch a new product, then have a model of that product and your other products to show. If you are a service company, then bring your marketing materials so that the lender can understand what your service is and how you sell it.

The proactive business owner enters into a loan meeting with a lender prepared to make his case. He has all of the important paperwork filled out and brings all of the materials he needs to convince the lender that the investment is justified. The more professional your presentation is, the more impressed the lender will be.

End Small Business Loan Frustration: Finance Your Dream Without A Bank

If you are like many people with an idea for a profitable business, you hit a brick wall when you try to get a small business loan from a bank. Perhaps you do not have a great credit score, or you have not been able to establish any credit record at all. Maybe you do…

If you are like many people with an idea for a profitable business, you hit a brick wall when you try to get a small business loan from a bank. Perhaps you do not have a great credit score, or you have not been able to establish any credit record at all. Maybe you do not have a lot of education or a business track record. You may not even have a bank account, much less a personal relationship with a banker.

It is a painful experience to be ignored or rejected, especially when you know you have a good idea and the motivation to make it work. Fortunately there is an alternative to bank lending that has emerged over the past decade in the United States: Microfinancing. Microfinance Institutions (also known as MFI's) provide small loans and other helpful services to businesses and individuals who find it difficult or impossible to get financing through traditional means. Originally limited to developing countries, there are now a number of these lenders in the United States and Mexico – and the trend is growing.

MFI's differ from banks in that that they exist to help people who can not get funding through the usual financial institutions. They know that not being able to meet a bank's requirements does not mean you can not be successful. In addition to loans they often provide business counseling, advice, and ongoing support to help establish and grow your business. Each MFI operates a little differently and has its own policies regarding eligibility and the timing and method of repaying your loans. While they typically do not insure that you have a bank account, credit record, collateral or someone to guarantee your loan, they may require that you join a small group to receive training and counseling. Loans must be repaid according to agreed terms and schedules. Once your initial loan has been repaid, you may be able to get additional loans to grow your business. Loan amounts different among MFI's but may range anywhere from $ 500 to as much as $ 100,000.

Some of the better known Microfinance Institutions in the United States include Grameen America and ACCION USA, both of which operate nationally. There are also regional organizations such as The Opportunity Fund for those in California, and CASH (the Community Alliance for Self Help) in Seattle.

Another exciting development is the creation of non-profit groups formed to allow individuals to make contributions which are pooled together to increase the funding available for micro-lending. One such organization is KIVA in San Francisco. Donors can search through descriptions of actual borrowers and businesses all over the world (including the US) and make loans of as little as $ 25 to a specific individual. As the loan is repaid, the donor receives credits which can then be reinvested, donated, or cashed out.

Whether you are seeking a small business loan or you would like to support borrowers, there are organizations ready to make your transaction a painless – and even uplifting – experience.

Need Business Capital? Merchant Credit Card Advance

Difficult economic conditions are affecting almost every facet of America's business community. High unemployment, deterioration of investment ports and overall lack of confidence in the economy are causing a “tightening of the belts” for most of the buying public. No one feels the pinch more than the small business owner; particularly those providing discretionary products…

Difficult economic conditions are affecting almost every facet of America's business community. High unemployment, deterioration of investment ports and overall lack of confidence in the economy are causing a “tightening of the belts” for most of the buying public. No one feels the pinch more than the small business owner; particularly those providing discretionary products and services. The life blood of any business is the availability of working capital. Operating lines of credit through local and national banks have been the traditional source of capital but the banks have tightened their belts as well. The small business owner is finding it next to impossible to secure credit lines from local and national banks without pledging significant personal assets.

Merchants that accept credit cards now have a source of working capital that transcends the underwriting restrictions and contractual requirements of bank lines of credit through credit card receipt advances. Categorically, this is not a loan. It is an advance up to $ 250,000 against future charged sales receipts. There are no upfront fees, no personal liability and no credit score or personal financial requirements. The advances are based entirely upon the historical card charged receipts of the business including Visa, MasterCard, American Express and Diners Cards. The basic requirement is that the business has been in existence for six months and has a minimum of $ 5,000.00 in charges per month. The maximum advance is typically 125% of monthly credit card receipts averaged over the previous four months. Practically every merchant who meets the basic requirements is approved and normally within 48 hours of submitting a one page application form. The entire process can be completed in less than one week. The funds may be used for any worthwhile purpose including:

  • Reduce or retire debt
  • Working capital in slower months
  • Purchase needed equipment or merchandise
  • Expand or remodel business
  • Open new location
  • Buy out partners
  • Pay taxes

Approval Prior to funding the merchant will be required to provide the following documentation.

  • Four complete credit card statements for each card accepted (All Pages)
  • One complete bank statements (All Pages)
  • Voided check with business name (to deposit funds)
  • Copy of driver license (to verify signature)
  • Signed funding contract

Repayment is accomplished through a deduction of a small percentage of the merchant's daily charge receipts and there is no requirement to change card processors. There is no interest rate applied to the funds because the credit card advance is not a loan. Total repayment includes a previously agreed upon fee to the institution granting the advance and is collected as part of the daily receipt discounts through the card processor.

The Merchant Credit Card Advance Program is a terrific short term capital source and is available to business owners in all 50 states. It is a quick and easy practical solution to the working capital requirements of business owners with no upfront cost and is secured only by future charge receipts.

Understanding Commercial Loans

Commercial loans are one of the most popular loans for entrepreneurs who want to start a new business or want to expand an existing one. A new venture necessitates a large inflow of funds. However, a large number of commercial loan applications are rejected both in the US and UK because people just do not…

Commercial loans are one of the most popular loans for entrepreneurs who want to start a new business or want to expand an existing one. A new venture necessitates a large inflow of funds. However, a large number of commercial loan applications are rejected both in the US and UK because people just do not understand the niceties of this type of loan.

A commercial loan is a loan that is primarily sanctioned for a specific business purpose. These loans are meant to encourage entrepreneurs. Why then do so many loans get returned?

  1. Typically, most loan officers put loan applicants through the grind. Loan officers are paid to review applications and identify those that are most describing. A review typically begins with two claims: one is for a business plan and the next is for copies of previous tax returns. So, the first step is to prepare a business plan, even in cases where the business is not a startup. This will convince the lender of the credibility and authenticity of the borrower.
  2. Sometimes, lenders are dissatisfied with the tax returns submitted by the applicant. Under the specified guidelines of the lender, such a business is not eligible for a commercial loan. One typical problem is related to the net income of the business once deductions have been subtracted.
  3. In some cases, the lender may be unable to give commercial loans for a particular type of business. For examples, most lenders do not offer financing for bars and restaurant properties. Another example is auto-service, which is slapped with a large number of environment regulations. Some commercial loans are special loans by their very nature. These include funeral homes, churches and gas stations. In this case, it is necessary to approach other lenders beyond traditional commercial lenders. Where traditional lenders do not grant the requested loan, a non-traditional commercial lender is the best option.
  4. When a business requires a loan for expansion purposes, it is necessary to convince the lender that they should invest money on the business. This is difficult if profits from the business are not very encouraging. Lenders need to make loan decisions based on the borrower's ability to generate cash and repay the loan along with the interest. The key is to emphasize the achievements of the business. In case the business has lost money, it is necessary to know why there has been a loss and what steps are being taken to rectify mistakes. Lenders look for a number of factors like business plan, leverage ratio and growth rate of the company.
  5. Sometimes, borrowers do not have sufficient collateral. It could be that the lender does not have sufficient knowledge of the value of equipment or machinery. In any case, lenders rarely lend the exact dollar for dollar amount against collateral. Even when they are persuaded of the value, lenders have to follow rules relating to loan-to-collateral ratios.

Commercial Loan and Commercial Mortgage – Same or Different?

At the end of 2010 there were estimated to be about 5.2 million commercial properties in the UK – an expansion of 32% over the last decade. Despite the economic downturn and glaminess, the credit crunch is often not visible when you visit a commercial property auction. In the last five years, commercial property deals…

At the end of 2010 there were estimated to be about 5.2 million commercial properties in the UK – an expansion of 32% over the last decade. Despite the economic downturn and glaminess, the credit crunch is often not visible when you visit a commercial property auction. In the last five years, commercial property deals increased by £ 7.7 billion, according to the Bank of England. So how are people acquiring so many commercial properties? The answer is with a commercial loan or a commercial mortgage. It appears leaseage is still available for the right deals in the commercial world.

In simple terms, a commercial mortgage is a loan taken out using a commercial property rather than a personal property as security. How much can be borrowed? Typically a LTV of 70-75% can be available, although unsurprisingly this figure has dropped in recent years. The Lender will also be keen to look at the borrower's ability to repay so producing a well-kept set of business accounts for a minimum of three years is also a necessity. If it is shown that the business is illegally to generate the cash flow to meet interest and capital payments then the Bank will prudently weigh this against the borrower. In addition sometimes the loan may also need to be secured with personal guarantees, depending on the covenants of the borrower. On the plus side, interest payments are chargeable against profits for the borrower providing a strong tax advantage to profit Borrowers and terms can be extended up to 25 years, much like a residential mortgage. Not all lenders will offer this type of loan though; only a commercial lender who specializes in commercial property loans and it certainly pays to use a specialist broker and shop around.

So what's the difference between this and the other commonly used term a commercial loan? The answer lies in security. A mortgage, by definition, is secured against a property where a loan, does not have to be, although often it is. The loan allows more flexibility, can be used for a wider variety of purposes and, of most importance to a rapidly expanding business, which can be set up quickly whereas a mortgage will require detailed valuation reports and legal documentation to be drafted. There is a difference too in rates and term. Unsurprisingly, because the mortgage is secured on a property it reasonably comes at a better interest rate – a reflection of the reduced risk for the Lender – and it generally can run for up to 25 years where the loan will probably be a revolving facility capped at 5 or 7 years.

Choosing which one is best is a matter of tailoring the requirements of the business. A mix of both is likely to be present in any business with the mortgage providing a backbone of long-term funding supplemented by a revolving loan facility. Either way the key thing to be conscious of is the ability of the business to repay. Defaulting on either is unpleasant, whatever the terms used!

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