Commercial Loan Information Blog

Private Lenders: The Most Important Person In Your Business?

2009-02-05T12:44:00.001-07:00

Private lenders are the single most important persons in your real estate investment business.

Why?
Well, a couple of years ago, you may have been able to get relatively inexpensive loans from your local bank or saving & loan. But those days are gone as traditional lenders are tightening lending practices and, in some case, have gone out of business. As a real estate investor you need access to cash that is both affordable and readily available when a good deal presents itself. Instead of looking for money from banks, saving & loans or even hard money lenders who charge high rates of interest, huge fees and two month closings why not consider private lenders as a far better alternative.

Who Are Private Lenders?
Private lenders can come from all walks of life. They may not even know the first thing about real estate investing but are simple looking for better returns on their money than they are currently getting with bank CD’s or money markets. Private lenders can be local business people, doctors, attorneys, accountants or even in some cases may be retirees with extra money to invest.

Private lenders are looking for investment returns in the 9% to 15% range. Most bank CD’s or money markets are only paying 3% to 5% and private money gives them almost double their current returns. Additionally, private lenders want to be secured by a lien on local rental real estate properties. Most private lenders want to be able to actually see the property that is securing their investment and, in fact, will most likely drive by and see the property from time to time.

Private lending is the process of borrowing money from private lenders (not banks or financial institutions) at rates higher than those private lenders can normally achieve from banks or savings & loans from CD’s or money markets and secured by local rental real estate.

Do Private Lenders Come in Different Forms Private lenders generally come in two forms. First mortgage lenders will lend up to 90% to 95% of the purchase price and expect you to fund the balance or use another private lender to fund the balance. Or second mortgage lenders who will lend you the 20% to 30% down payment you need after you have arranged a bank loan for the first 70% to 80% of the purchase price.

Do you want to learn more about Private Lenders and get our brand new FREE 20-page ebook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" then simple click here for your instant download => http://realestatewealthtoday.com/FREE-eBook.html

Difference Between Subprime And Hard Money Lenders

2009-02-05T12:35:00.001-07:00

Often people tend to get confused with terms such as subprime loans
and hard money loans. Both these loans are specialized to serve customers who are unable to obtain credit from traditional money lenders such as banks, credit unions and mortgage companies. Although both these terms can be used interchangeably, there are certain subtle differences between subprime and hard money loans:

Subprime Lenders:

Subprime lenders are specialized in providing loans to customers at higher interest rates compared to other loan programs. Customers with a bad credit history or those who are unable to make any down payment or those who are not having a steady income flow can opt for these loans. Interest rates are determined based on the financial situation of the borrower. Greater the risk, higher will be interest. Interest rates can either be fixed or adjustable. Apart from this, subprime lenders also charge exorbitant fees for providing a loan. Closing costs are also higher when applying for a subprime loan.

Hard money lenders:

These are usually private individuals and small local companies that provide loans to customers who are unable to gather credit from even a subprime lender. One example is the situation where borrowers are facing the risk of foreclosure due to their inability to pay back a subprime loan. In these situations, a hard money lender can be approached as a final alternative to obtain cash and repay the previous mortgage. Loans are provided based on the equity in the property.

However, even hard money lenders charge high interest rates and the repayment period is usually short. Hard money loans are fast and easy to obtain because the lenders do not require any verification of credit records of the customer.

Are you familiar with the term Hard Money? Hard money is money loaned to you by private investors. These private investors can be from anywhere but normally the lenders would want to work within their own state, so if you're from California than you want to find an investor in California.

So what type of loans the hard money lenders will loan money on? The first type of hard money loans lenders are offering is construction loan. In construction, the hard money lender will loan the borrower the money in stages.

Example: You own a piece of land in Los Angeles, california, on that land you want to build a house, you have the plans approved by the city of los angeles and you're all ready to go. Now you need a hard money loan because it will be easier to qualify and get the money you need for the construction. You will call a hard money lender and give your information, the approved plans, your financials, your budget for the construction (you can get it from your contractor), then lets say the lender agrees to loan you the money you need, but the way the hard money lender will loan you the money is by stages, and the stages are:
When your Contractor finishes the foundation, the contructor will get paid after inspection that is done by the lender $10,000 for the foundation work, Than when your electrician finishes the electricity in the house, than the electrician will get paid after inspection is done by the hard money lender another $7000. You understand the concept? All contructors will get paid by the hard money lender by the completion of the construction.

Why the hard money lender do that? Because he want to have control of the money, private investors know the risks they're taking but they're still willing to take these risks only if they have 100 percent control of the money.

Why hard money lender will choose to Loan money to investors and not homeowners? This is a very good question that a lot of people should know the answer for. The hard money lenders would not want to have to take a homeowner out from his home because he did not make the payments, but with investors it 's different, it 's 100 percent business and that 's what the lenders want, business. What type of properties hard money lenders will loan money on? A hard money lender will loan money to many type of properties: single family residents, condos, townhouses, apartment buildings, hotels, motels, office buildings, shopping centers and many others. What hard money lenders don't like, it 's land. It will be very hard to find a hard money lender that will loan you money on a land, and the reason is because there is no income to lands, maybe you can get a hard money loan on a golf course or maybe a land that you about to develop something on, but raw land- forget about it.

Today hard money lenders loan more money to commercial real estate investors rather then to residential investors and the reason is less risk. Today the residential market is not going up, values of homes are actually going down by more than 30 percent, and every day more foreclosures are coming out on the market, so the hard money lenders are smart enough not to participate in taking risks with homeowners.

Commercial real estate still very competitive, investors are still buying properties, remodel properties and build new properties. The commercial real estate market is still alive just like it was in the residential market 3 years ago, and hard money lenders are still in the game, and now they're busy more than ever because the banks don't loan money that easy to borrowers. So commercial properties rather than residential properties, and construction Loans. Good luck

About Author:
Pauline Go is an online leading expert in finance industry. www.madalcapital.com

Mini Storage Financing Made Easy.

2009-01-24T16:33:00.002-07:00

Self Storage Loan/Mini Storage Commercial Mortgage Loans. Loan amount ranges from: $1,000,000 - $500,000,000 and up !

Commercial Capital Partners provides conventional lending all over the United States on loan requests for Self storage financing. We will provide financing on all types of self storage facilities.

Commercial Capital Partners will work with you to provide the right loan structure for your self storage facility whether it is a purchase, refinance, or construction.

We have financed self storage facilities that are being leased up, are already fully leased, or have yet to start construction. We specialize in providing permanent financing for self storage projects.

Commercial Capital Partners can provide you with either fixed or adjustable rate options depending on your need. If you are purchasing a self storage facility that is struggling and needs to be turned around Commercial Capital Partners can offer you a loan based off future projections.This loan is typically amortized over 25 years with a term of 5 years. This gives you the time to turn your self storage property around and then finance it with a longer term fixed rate mortgage.

Please review our self storage financing options below:
Location:
Nationwide
Type:
We provide financing for purchase and refinances of Self storage loan facilities and Mini self storage loan properties.
Loan Options:
Fixed and adjustable loans available.
Amortization:
25, 30 Years
Term:
10, 15 Years
Loan-to-Value:
Self storage financing - 75% LTV.
Debt Service:
DSCR on Self Storage properties is 1.25-1.30
Collateral:
Self storage or Mini Self Storage real estate facility

For further information or to start the application online, go to http://www.CommercialFundsOnline.com

The Five Best Things You Need to Get Unsecured Business Loans

2009-01-24T16:24:00.001-07:00

You don't necessarily have to do a lot in order to get unsecured business loans. However, you should conduct due diligence and find out what to do prior to applying for these kind of loans. The next thing you need to do is find people that will be able to assist you in getting the loan.

You will have to fill out an application in order for the loan consultant and lender to have enough information for processing. They should have enough knowledge to help you get something in terms of unsecured business loans.

In order to verify your identity, they will need your personal information, including your name, physical address, social security number, date of birth and other pertinent information. Make sure that you use your legal name and not nicknames.

Here are the five best things you should about getting unsecured business loans:

1. In your application, you will need to provide the name of your business, address of the business, phone number, and tax ID#, among other things. If you are a sole proprietor, you will need DBA registration, and social security numbers. For both parties, you will need to provide what kind of entity your business is under.

2. Since there are different kinds of unsecured business loans, you will need to provide the information requested in order for your loan application to be processed. Be sure to include income from your business from past years. Be as thorough as truthful as possible. The more information you give, the better chance you have of your application being processed.

3. You should have a good credit history. It should be free of many blemishes as possible. Work to get your credit up to par. Get rid of any past due payments and pay off smaller payments that have been around for several years.

4. You will need to provide all of the assets you have. Office equipment and checking accounts go in this category.

5. You will also need to include any liabilities such as accounts payable, rent payments, monthly debt payments, including credit cards and anything else that you owe. You can now apply for loans online. There are no fees to pay upfront. However, if you get approved and you accept the offer, there will be fees you would have to pay them. In order to fully understand the process, a loan consultant will be able to assist you. A good consultant will be able to help you in the process of getting unsecured business loans for your business.

You can get loans starting at the low five figures up to six figures. If your credit is good, you may be eligible for more money. When doing the application online, it only takes a few minutes. You will find out about your approval in no more than two days. Depending on your situation, you may not need any documents. Just think, within 24 to 48 hours you could have an increase of funds for your business.

Anthony Griswold creates articles about unsecured loans and business loans. All of his articles can be used as tools when seeking unsecured financing. Please visit the following link to learn more: start up business loans.

Article Source: http://EzineArticles.com/?expert=Anthony_Griswold

Current Issues That Kill Commercial Property Loans

2009-01-24T16:22:00.001-07:00

Working on a commercial property loan? Below we discuss some of the most common issues that kill borrower's commercial property loans and what you should watch out for. The last thing you want is to blow 4 months and $6,000 on third party reports only to have your bank "pass" on your loan request.

Value

Value now tends to be one of the biggest issues with commercial property loans. As real estate values continue to decline in most sections of the county, and within all property types you should be very aware of what your property is now worth and what the maximum loan to value requirements are from the banks that you are considering working with.

Loan to value is a ratio used to reflect how much equity you have in your property and how much equity you would lose if you walked from the building. For example, if your building is worth $1,000,000 and your existing loan amount is $700,000, your loan to value ratio is 70%. Obviously, banks want lower loan to value ratios as it lowers their risk.

A more subtle issue here is if, or to what degree your bank will "tamper" with your appraisal report. It's common that they will review the appraisal report and alter the value before it is reported to you (I am not implying there is anything illegal here). They will lend based on what they think it your property is worth. If your loan to value is high to begin with, you'll need to know what their reputation is with this. You will only be able to find this out by working with experienced third party professional that have closed multiple transactions with the bank in question. The loan officer at the bank will not reveal this. A commercial mortgage broker will, as they get paid when your loan closes.

Wrong Bank to Begin With

This ties into above, but it's never been more important to know how strong the bank really is and what their real appetite is for your commercial property loan. Most banks are now on the "sidelines" and not funding commercial loans. Many of these banks simply don't have any money to lend and others are being conservative and want to see the general economy turn around before they start to lend again.

However loans are still closing loans. It is imperative that you deal with the banks that are still actively funding loan requests. For example, SBA loans and the participating lenders have weathered the storm fairly well, as they were down by only 30% in 2008 from 2007. Compared to conventional or CMBS loans that have come to a screeching halt, this looks pretty good.

The best way to know which banks are really interested in your commercial property loan and which ones will have the highest chance of closing is to get an unbiased third party referral. Talk to your CPA, Attorney or an experienced commercial mortgage broker (like us). Make sure that whoever you talk to has recently worked with the lender they recommend. When working with a broker, make sure they are experienced and have recently closed a loan with the bank.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. 248 885-8797. commercial real estate loans or commercial bridge loans

Article Source: http://EzineArticles.com/?expert=Jeff_Rauth

Cash Flow Financing When Your Business Credit is Poor

2009-01-24T16:19:00.000-07:00

The world of business is simply not a static place. It is the rare business that hums along without running into periods of great profits and periods of barren revenues. When barren times hit, credit can be damaged and financing can become difficult - particularly cash flow financing.
What is cash flow? It is simply the money that you have on hand to deal with debt obligations during a certain period of time. It is also often defined on a project by project basis. Let's look at an example.

I make bumpers. My sales department produces a home run. Toyota orders 400,000 bumpers for the new Toyota Camry model. After indulging in a few celebratory adult beverages, I start thinking through the project. Specifically, how am I going to pay for it since Toyota will only pay on delivery of the bumpers? I am going to need a lot of money for materials and labor to produce 400,000 bumpers. I feel a headache coming on and not from the celebration!

The immediate answer is to head down to the bank and ask for a loan. On the off hand chance you've been in space for the last two years, it is probably worth mentioning the finance industry has had a bit of a problem and isn't exactly handing out a lot of loans these days. I should probably also mention that the business went through a bad period a year ago and the credit rating came out of it looking like it had gone 5 rounds with Mike Tyson when he was young - bruised and battered.

All and all, I have no chance of getting financing at this point in time. My best option would be to look to private money lending, but that is going to be really expensive. I could be looking at paying 10 to 15 points and a high interest rate. Surely, there must be some solution? Fortunately, there is - cash flow financing using your accounts receivables.

You can sell your outstanding invoices in exchange for money today. A factoring company will pay you 70 to 80 percent of the invoice immediately. They then release the rest of the money once your customer pays the invoice and take a fee of three to five points depending on the situation. Importantly, the company is going to look at your customer when evaluating the risk involved, not at your company. Why? Well, your customer is the one that has to pay the invoice, not you! As a result, your bad credit does not matter to the company.

The world of finance is in a state of shock these days as banks small and large teeter on the edge of the bankruptcy abyss. This is not the case with factoring companies. They are providing cash flow financing every day and the process only takes a few days from application submission till you have cash in your hand. If you need financing, make sure you consider this option to meet your cash flow needs.

Stephen Teak writes about factoring for http://www.FactoringCompanyInformation.com - your source for factoring solutions to your financing needs.

Article Source: http://EzineArticles.com/?expert=Stephan_Teak

Commercial Mortgages - Bank Requirements For Multi-Family (Apartment Building) Loans

2009-01-24T16:17:00.001-07:00

Many commercial real estate investors contact our firm and want to know in-advance if their deal can qualify for an institutionally funded (bank) commercial mortgage loan. Unlike residential lenders, commercial mortgage lenders do not issue "pre-approvals"; we simply can't tell if a deal will get done until we do some underwriting. We can, however, share with you some basic guidelines that virtually all conventional lenders are considering today.

Loan-to-Value (LTV)

LTV has been dramatically reduced during this "credit squeeze". Just 24 months ago we were seeing LTV ratios above 80% and lenders were allowing large 2nd mortgages. Standards have tightened. In today's credit environment, investors should not expect to see any loan offers above 75% and many are coming in significantly lower. 70% is a normal LTV ratio on new purchases with some lenders willing to go to 75% on refinance loans. Seller carried 2nd mortgages are discouraged and often disallowed altogether. Borrowers and sponsors without large cash investments in a deal will be turned away.

Debt Service Coverage Ratio (DSCR)

Banks, insurance companies and Wall Street brokers simply will not write loans against underperforming or vacant buildings anymore. Only stabilized assets need apply for institutional funding now-a-days. A building must be able to demonstrate a history of profitability and low vacancy. To be approved for a bank loan for the purchase or refinance an apartment building, the building must have a net-operating-income (NOI) equal to 125% of the proposed mortgage payment (a DSCR of 1.25). Deals that do not meet this requirement will have to wait until the credit markets improve or seek private funding.

Credit

Borrowers or sponsors with weak credit scores are being summarily rejected by banks. To qualify for a low interest loan with good terms, from an institutional lender, all the principle borrowers need to have a tri-merged credit score of 640 or better. I know this is bad news to many good people with problems on their credit reports, but that's just the way it is right now.

Experience

Banks are not willing to take a chance on first-time apartment investors. All borrowers are now required to demonstrate real experience in rental housing and a track record of success.

Net-Worth & Liquidity

Many banks have instituted a policy of requiring that their borrowers have a net-worth at least equal to the balance of the loan they are seeking. In-other-words, if you want to borrow $1MM from the bank to buy an apartment complex, you need a net-worth of at least $1MM. Further, they will want to see that you have some money in the bank above and beyond the funds you're using for a down-payment. Often they will require borrowers to have a savings account balance equal to 6-9 monthly mortgage payments.

Quality Property in Good Location

To secure financing from a traditional lender the building must be in a city or town that is not particularly depressed economically. Hard hit areas of MI, FL, CA or NV, for instance will be shunned. Also, the structure must be in good repair, lenders will shy away from buildings that have a-lot of deferred maintenance.

Deals that meet these basic requirements will find that there is no lack of liquidity even in this tight credit market; there is plenty of money for apartment loans for the borrowers and buildings that can qualify. Unfortunately, for deals that can not meet these higher lending standards, investors are going to have to seek privately funded, often called hard money loans or take on a well-heeled partner in-order to get funding.

MasterPlan Capital LLC - Commercial Mortgage Loans - Private and Institutionally Funded - Equity Financing - Asset Management - Simple, 1 Page Commercial Mortgage Application Online - Quick Answers - Close in 10 Days - The author, Vincent Remealto, is a commercial real estate valuation and underwriting analyst for MasterPlan Capital.

Article Source: http://EzineArticles.com/?expert=Vincent_Remealto

Advantages of Commercial SBA Loans

2008-12-10T09:46:00.001-07:00

Some of the most reliable commercial mortgage programs offered are government sponsored. One of those reliable programs is the SBA commercial loan. Borrowers may not like some of the features, but bottom line, if they need a new commercial real estate loan this maybe their only option, besides commercial hard money.

Lately, SBA commercial loans have gotten a bad rap. The SBA features some exceptional advantages for many commercial borrowers would such as 90% commercial financing. The typical commercial mortgage only goes up to 75% financing. That is 15% loan difference back into the borrowers pocket or can be used as capital for their business. SBA loans allow borrowers to use projections and help commercial applicants who have low cash flow or assets. In contrast, most conventional lenders will just say no to these loan requests.

However, with those incredible benefits offered, a large complaint still exists which is the length of time to actually get the loan and the load of documentation necessary. For some borrowers, the government's process simply becomes too much to accept.

A solution to combat this process is to apply with a commercial mortgage company which is a preferred SBA lender. The significant factor here is that a preferred SBA lender has prospective investments go through underwriting just one time as opposed to two times if they are not "preferred status". It is not uncommon to wait six months for a SBA loan update when going to a commercial mortgage company which is not preferred.

Another hindrance are the expenses for an SBA loan. For example, on the well-known SBA 7a loan program, the SBA charges a loan "guarantee fee" of 2.75% of 75% of the loan's principal balance. It is important to know that the SBA charges this fee, not the bank or the commercial mortgage company you work with. In contract, most banks or mortgage companies only charge 1%. Some ways to wipe this fee out or lower it is to go with a bank that pays the SBA guarantee fee themselves, but nine times out of ten, the SBA applicant will go on to pay this fee themselves.

As banks tighten their standards not only in residential but also commercial lending, it is even more important to apply for an SBA loan. They are regarded highly as one of the most reliable commercial loan programs available for owner occupied loans.

Mario Olivera is a investor and contributor with ByOwner MLS Homes and iJumbo Loan
Article Source: http://EzineArticles.com/?expert=Mario_Olivera

Are Banks Funding Apartment Loans, Refinancing and Commercial MultiFamily Construction Projects?

2008-12-10T09:42:00.002-07:00

A common question being asked in today's financial climate, "Are apartment financing, MultiFamily property refinancing or apartment construction loans still available?" The answer to this question is a resounding YES. I continue see loans funded for apartment purchases, apartment refinances and construction lending. This is awfully good news in a time of a protracted credit crunch; a credit squeeze which has now gone global in it's scope.

A source close to my company, one with ties to the top counsels of Fannie Mae and Freddie Mac, recently confided that Fannie and Freddie have been making money ONLY in the Apartment and Mobile Home Lending sectors.

The upshot is this: These two venerable institutions of probity are determined to increase liquidity and strengthen apartment lending programs. The Fed needs to hang it's hat on something, so why not strengthen an already existing stable lending platform to promote future growth in an industry already doing well: Apartments.

This protracted credit squeeze began as a virus. This virus started with the housing industry and contaminated the commercial real estate market along with just about every stock, financial instrument, business man, woman or line of credit in the country. Apartments have been the least impacted the credit crunch, but sales volume has still registered sizeable decline.

What a mess it has become. The chill in the credit markets began in October 2006. By October of 2007, this chill had become a deep freeze.

To understand the steep decline in the commercial real estate industry, one need only look at the numbers: Total commercial sales volume for October 2008 was barely one-quarter of it's October 2007 level and just over 20% of the levels it achieved in 2006. Now that is a drop!

The aggregate deal volume and sales volumes for commercial real estate as a whole is down 75%, October 2007 to 2008.

For apartments, the fall off in deal volume has been sharp and steady: The number of properties trading hands has fallen 60% from October 2006 to October 2007 and has fallen another 75% this past 12 months.

There are several explanations for this but perhaps the number one reason is price risk, as measured between the spread of cap rates and the 10-Year Treasuries. In the apartment sector, this spread has more than tripled, (not Good) to a spread of 263 bps from their narrowest point in July of 2006, when it was 81 bps.

Between 2000 and 2004, the total renter households declined by 1.9 million as home ownership increase from 66.9 percent to 69 percent.

In 2005 this house-hold, rental-living trend began to reverse itself. Since the beginning of 2007,the home ownership rate has fallen by 110 basis points, resulting in 1.5 million additional renter households. This reversal is most pronounced in the younger age segment but it cuts across all age lines. The trend is up for rental-living-units.

In the end, Apartments are holding up well. Financing IS available and more people than ever are in need of rental housing.

Capital Line is an independently licensed, Capital Line Commercial Funding Group, provides a diverse online innovative Commercial Lending platform backed by a staff of seasoned, experienced professionals, enabling Capital Line to provide a one-stop financing solution for Commercial property financing and apartment loans.
Article Source: http://EzineArticles.com/?expert=Arthur_Hooper

Hard Money Commercial Loans - Current Status

2008-12-10T09:38:00.000-07:00

Hard money commercial loans, though still one of the most viable sectors in the commercial loan business, seem to be showing signs of deterioration. A few lenders have actually gone out of business and many have increased their guidelines beyond the point of "cherry picking", so it seems. As in all areas of the commercial mortgage field knowing how is still funding is paramount to getting loans closed.

Commercial Hard Money Viability

In general commercial hard money lenders are getting looks at some of the best transactions ever as many loans that are now coming to them are really traditional bank type deals. Due to most banks putting a halt on funding, some borrowers have become more willing to talk with hard money lenders as a way to get something done, often to save hard earned equity that's left in their buildings.

As a result commercial hard money has been booming and the lenders have been swamped with deals. Commercial hard money lenders have had an opportunity to "cherry pick," i.e. fund only the best deals that cross their desk. Deals that 1 year ago would have gone conventional. Times in deed seem to be good for hard money lenders, however we are seeing signs that this sector maybe the next to get pushed around.

Commercial Hard Money Why the Deterioration

In general we are seeing a few of the national commercial hard money lenders greatly restrict what they are funding, and a few that have gone out of business. For example, many have stop looking at special purpose properties and or place credit score restrictions on borrowers. For example a few national hard money lenders will no longer consider deals with borrowers scores below 700...

Sound familiar? Remember when other conventional sources (think Lehman) started to place restrictions on what they would look at? Every 3 weeks it was another round of what they will no longer do, till the announce was made that they shut down their small balance division.

So is this cherry picking out of control or really the first signs slowing funding? We think the latter. The deterioration has been caused by a number of factors, including sliding values, slowed economic activity in general and for some hard money lenders a slowdown in their access to capital to fund deals. Again, knowing which lenders are still healthy and still funding deals is probably the most important component now to getting loans closed.

Just like everyone else, commercial hard lenders have to get their cash from somewhere. It's rarely just an individuals own cash. Rather it's normally a hedge fund and or a pool of cash from a group of investors that have used this cash to secure warehouse lines. Whatever the case maybe, their cash though less tied to Wall Street than banks, is still often tied to Wall Street.

It have never been more important for borrowers to work with knowledgeable professionals that are n top of the industry and know which commercial hard money sources are still viable and still closing loans. The last thing a borrower wants in this market is to have their good faith deposit taken from them with nothing to show for it. Which unfortunately is happening more and more these days.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan a national commercial mortgage brokerage firm. 248 885-8797. He also has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $5. Check it out commercial real estate loans or commercial hard money loans
Article Source: http://EzineArticles.com/?expert=Jeff_Rauth

What is a Commercial Loan Broker and Why You Should Use One?

2008-12-10T09:35:00.000-07:00

A commercial loan broker is a specialist intermediary between businesses seeking funding and commercial lenders, acting on behalf of the client business. Taking advantage of the services provided by a commercial broker when seeking a business loan is essential where no established relationship exists with a bank or the client is not sure what the going rate is for any particular funding type. The consequences could be that any business loan taken is over priced, that could be a very costly mistake indeed!

The typical broker will have access to a network of lenders and have specific knowledge of any loan criteria, thereby allowing the targeting of the right lender for any set of business requirements and circumstances, therefore maximising the chances of a successful application.

Many customers of commercial loan brokers have usually already approached a bank and had a loan application turned down, sometimes more than once! The reasons for this are numerous but could be as simple as the client not presenting their business plan very well, insufficient security or maybe the client is regarded as sub-prime by the bank lenders. However once a business has exhausted the bank route, few have the knowledge of where to go next. In fact, approaching a commercial loan specialist in the first place could have resulted in the placement of the financial requirement with the right lender first time!

A good commercial broker will initially take the time to understand your business and future plans before approaching any lender. If the business proposition has the potential to be financed then the broker will package the deal, select the most appropriate lender or lenders and ensure that any offer is priced competitively.

Brokers normally make a commission on any business loan placed, but not always, some will always charge a broker fee, others will only charge where no commission is available. The most important thing where a fee is charged is that it is success based, upfront broker fees should be avoided at all costs! One possible exception to this is where a business plan does not exist and your intermediary offers this service.

Are you prepared to take a chance when seeking a business loan, establishing a working relationship with a commercial finance broker will pay dividends time and time again! Eland Business Services Limited are UK based Commercial Finance Brokers. © Eland Business Services Limited
Article Source: http://EzineArticles.com/?expert=Mark_Dalton

A Merchant Cash Advance

2008-12-05T09:06:00.000-07:00

If you own a small business and have ever sought out business financing, chances are, you've heard of a merchant cash advance. But did you take the time out to find out exactly what a merchant cash advance is? If you did, you may have discovered that obtaining adequate funding for your small business is not as difficult as you may have previously suspected, and business financing is only a few steps away.

Merchant cash advance lenders offer merchant business owners a means of financing their businesses, especially when other traditional methods fail. Lots of lending institutions such as banks and/or credit unions have loan eligibility requirements that are difficult to meet, thus narrowing the pool of prospective business loan recipients to a select few.

Some may view a bank's rejection as the end of the road, and give up on their plans of business expansion until they can meet the bank's requirements. But others are fortunate enough to learn of the merchant cash advance, which provides funds for small businesses without requiring applicants to offer collateral, present personal finance statements, or have excellent credit scores.

Most merchant businesses that process credit card transactions are eligible to receive a merchant cash advance. They can get a lump some of money in advance for a business' future credit card receivables.

Merchant cash advances can be used for various things. A business owner may need funds to purchase additional inventory or help finance the opening of another store. Whatever it is, a merchant cash advance can support it, as most lenders do not have any restrictions on how a merchant cash advance can be used.

Usually, a business owner will also be allowed to renew his/her merchant cash advance, making the search for business financing no longer a dreaded and difficult task.

Gaston C. writes articles about Merchant Cash Advances for Merchant Resources International.
Article Source: http://EzineArticles.com/?expert=Gaston_Castro

Is a Commercial Loan Right for You?

2008-12-03T10:33:00.000-07:00

Are you considering a commercial real estate loan to fund your next investment property? Commercial loans are very popular today because of the high return on your investment. Investment properties are appreciating at around 10% per year. In rare cases, you can even find properties that double their value ever 5 to 6 years. Commercial loan interest rates run anywhere from about 11% to 17%, so you can clearly see that the appreciation of the property offsets the high interest rates that you encounter with a commercial loan.

If you are new to the real estate investing venture, I am sure that you have a few questions. I will address some of the most common questions with their answers to try and help you understand if a commercial real estate loan is for you.

First, you might ask, what are the advantages of these types of loans? They offer fixed interest rates that are locked in for the life of the loan. You can obtain one of these loans to create an organization, or build your current organization bigger and better. You can also use these loans as a way to refinance an existing property.

When it comes to options, you have a few. You can either obtain a hard money loan, a conventional loan, or a government regulated guaranteed accommodation. Just like personal real estate loans, you can borrow up to 80% of the loan to value of the property. You should expect that you will earn back your investment in about 10-40 months.

Second, you might ask, what types of loans are there for commercial purposes? There are privately funded loans, also known as hard money loans. These types of loans are usually easier to get but have a much higher interest rate. There are also conventional loans and government backed loans. Each of these offer much lower rates, but are more difficult to obtain.

Last, you might ask, what are the tax benefits of owning a commercial investment property? When real estate appreciates, or increases in its value, you can refinance and take the cash out to roll into other properties or assets. If you do this, you will not be taxed on the amount your property appreciates. Any of the money you use for personal expenses, must be taxed by law.

Obtaining a commercial loan is like fitting the pieces of a puzzle together. If you have the right loan officer and sellers, your experience can be pleasant and very rewarding.

Bart Icles is an expert when it comes to commercial real estate loans, hotel loans, and apartment loans. Visit National Commercial Funding today for more information or to get started! You can also check out poor credit student loans if you are in need of a student loan.

Article Source: eArticlesOnline.com

Bad Credit Business Loans.

2008-11-28T07:07:00.000-07:00

However, once you are running your own business, it doesn't take long to realize the price of that freedom. Being a business owner is a wonderful feeling, but it requires a substantial investment of both time and money. Most business owners are prepared for the costs of starting a business, but they aren't prepared for the capital they will need to keep the business running smoothly after it is established.

Having access to additional funds to help you with the everyday business expenses can be absolutely priceless. You may need the money for expanding or changing the focus of your business, to purchase inventory or to pay for necessary training. Whatever your needs, most businesses do need additional funds at times.

The sad fact is that for many business owners, a loan may be extremely difficult to acquire. For one reason or another, their credit is bad and they are continually passed over by banks for business loans. If this sounds like your situation, you are far from alone.

Today 's Americans carry much more debt than any previous generation. That can eventually lead to poor credit. It 's not that you have spent money irresponsibly. More likely, you funded necessary purchases with credit and then fell victim to high interest rates.

No matter how your credit gets damaged, having a poor credit rating can put up walls all around you. You may feel trapped by your business expenses because it seems like there is no way to get the money you need to keep your business running smoothly.

You can break down those walls of bad credit with bad credit business loans. While there are many types of bad credit business loans, the main idea is that they can help business owners get the money they need when banks will not loan to them.

One of the most popular types of bad credit business loan works on the basis of receivables factoring. This type of bad credit business loan allows the business owner quick access to the funds they need. Repayment is funded with future customer credit card payments to the business. You need to provide only proof of your monthly credit card income to be considered for a loan like this.

Obtaining business loans with bad credit may be easier than you expect. If you have been frustrated with strict bank loan rules that exclude you because of your payment history, you may be wary of looking for business loans. But thanks to lenders who specialize in bad credit business loans you may be able to get the money you need without your bad credit getting in the way.

While a bad credit business loan can help you with the immediate and pressing needs of your company, it can also have positive long-term effects. Making your payments faithfully on time every month can help improve your credit rating, which is important for the future of your business.

There is no reason to let bad credit ruin your business plans. Even if your credit history is not spotless, you can get the money you need to keep your business growing and moving forward. Don't be afraid to apply for bad credit business loans when you find yourself in a tough financial spot. You may be surprised at how quickly your business' extra funds can be in your hands and helping you achieve your goals.

About the Author

David Castro often writes articles about Unsecured Bad Credit Loans and Small Business Loan for Merchant Resources International - To Learn more Visit Us at http://www.cashprior.com.

Article Source: Content for Reprint

Commercial Property Loans

2008-11-06T15:28:00.002-07:00

Commercial Property includes any land, building, hotel, stores or facility that is used for business or is available for sale for the purpose of starting a business. It clearly indicates that it is used for the purpose of making funds.

Commercial property loan is a term used for financing the business. It is a primary method that is used to own a commercial property. Whether the finances are required for running a new business or merging the business or expanding it for further growth but it has to be commercially used.

Commercial property loan can be a secured loan or unsecured loan. In secured loan, the lender keeps the commercial property as collateral to make sure that the borrower pays the monthly installments on time. It is a risk-free deal for the lender as he can always sell the property if the borrower becomes default in making payment. On the other hand, personal loan is generally referred to as unsecured loan. It carries many benefits for the borrowers as the lender does not need any property as collateral and tax returns are not required. Above all, it takes less time for the process to follow and can get the approval at a very short notice. The lender just needs to do the credit check to approve the loan. Thus, it involves less risk for the borrower.

Commercial property loan mostly carries low interest rates but it is affected by several factors. If the borrower has a good credit history and the business is very profitable, the interest rate is expected to be low. The span of the loan is likely to be lengthy with low interest rate and the lender keeps the commercial property as collateral. The span is generally 25 to 30 years and the borrowers age should be approaching 65 by the time the term of the loan expires. The interest rate can be fixed rate or adjustable rate. In fixed rate, the amount or the interest rate remains the same for the term of the loan. In adjustable rate, the interest rate keeps on changing with the change in the market trend.

Another important aspect while applying for a business loan is to illustrate the business plan to the lender. He would like to understand that how the business is going to be profitable or could make good money so that the borrower can make the loan payments. If the borrower has a running business, the lender would like to see the revenue generated in the past few years. Once the lender is contented, the borrower can have success in achieving the commercial property loan.

Shopping for a commercial property loan could be a complicated process. The required procedure needs to be followed for the approval of the loan. To start with, it is vital to acquire the optimal broker or the bank that can provide low interest on the commercial property loan as every broker gives a different quote. The research can be done by meeting various brokers or by filing the application online with numerous websites on the internet. Other sources of lenders could be credit unions, mortgage banks, wholesale lenders and portfolio lenders.

Online loans are easy to shop and provide lot of convenience to the borrowers. Sometimes they offer instant pre approval and quotes. Online help is also available 24 hours to talk to the experts who can answer all the queries. But whether its online or traditional method, once approved, the process has to be same.

The lender would need following documents for analysis:
• Credit Report
• Collateral papers
• Leaf stating business profile
• Organization documents
• Sale and purchase agreement
• last 3 years tax returns
• 1003 Application
• loan supplement form
• Proof of Insurance and,
• Recent Bank Statements

Once the documents are analyzed and the loan is approved by the broker, the borrower is advised to sign the documents and make a down payment. There are various zero down payment schemes available but that involves high interest rate and also added insurance on the loan amount, if the borrower becomes bankrupt. Generally, the borrower has to pay 20% down payment i.e. 20 percent of the total loan value. Brokers can make up to 90 percent Loan to Valuation (LTV) and if 20 percent payment is made then LTV happen to be 80 percent. The loan can be released in the form of check, draft or electronic wire.

With more and more financing companies available, it’s easier than earlier days to find the best and productive option. An online search can produce numerous results. Surf the results and surely the borrower can yield constructive offer. Once the borrower is delighted with the offer, work with the lender to acquire the loan.

As commercial property loans are meant for the business group, it is the best available option for the ones who need financing for their ventures.

Author: Prerna Anshul Panwar

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2008-11-05T21:15:00.001-07:00

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Merchant Cash Advance Loans.

2008-11-05T21:06:00.002-07:00

Merchant cash advances are a great way for small business owners get the funding they need, with a fast and simple process, merchants can be funded with up to $500,000 dollars in as little as 10 days.

How merchant cash advances work?

A lender will purchase a small percentage of your future credit card sales, until the payback is completed and will give you upfront the money your business needs. Often times the business owner will be approved even with a less than great credit history record, making a merchant cash advance a top funding choice.

How do the lenders make money?

Funding charges can widely vary, and that 's not just from one lender to another, but from one cash advance to another. For example, the payback on a $10,000 cash advance could be as low as $11500 or as high as $14,000 dollars.

Even though there is a fixed payback daily percentage, and because of that, theirs is no fixed monthly payment, you pay as you sell; the payback factor varies depending on your business sales and the amount of money asked for.

If your business is doing well and sales are good, the advance lender collects the money sooner making the payback amount rather high. Since there is no time limit on paying back the loan, the annual rate will decrease as the payments will be extended over time, although the lender typically forecasts a rather short term for payback, it could usually take less than a year.

There are no questions that the merchant cash advance cost for this kind of unsecured funding is going to more expensive than the cost of a traditional loan, but if you understand the advantages of a cash advance and know how hard it would be to qualify for a bank loan, you will find that a merchant cash advance is a great option.

Often, business owners interested in funding programs like this may have a less than perfect or even bad personal credit history. They may have credit history records like past tax issues, a list of delinquencies, collections, liens or even judgments that would be an automatic red flag for a traditional bank loan. Instead, the merchant cash advance industry is here to help businesses that can't qualify for traditional funding methods.

The lender risk:

There is a rather high risk when providing these types of unsecured funding options (hence the higher cost to the business owner for the money), but they use advanced funding models to determine the possible future credit card sales. They also offer the cash advance with fairly short payback terms to help counter the risk.

Although the approval is much easier than it is with most bank loans, few cash advance lenders will lend to new merchants or start-ups without a history of credit card statements. Even less lenders will approve amounts larger than what the business can predict to earn from credit card sales in a year.

The merchant cash advance lender takes all of the risk, but since it is paid out of projected future sales, it is typically a risk worth taking. Seasonal businesses that need cash flow to move them through slow seasons or merchants, who have an unexpected low season, may find a need for a cash advance until business picks up.
Merchant cash advance lenders say that slow businesses are not the only merchants interested in this funding method. Most types of businesses are often ignored by traditional banking institutions.

There are many times when owners of healthy small businesses could use cash flow or working capital to help build their businesses but don't qualify for the traditional bank loans. These include franchise owners who have exhausted their personal savings to purchase their franchise and would like to open another one; merchants who can buy bulk inventory at discount rates or move into a new, more efficient location; expansions; new equipment; or simply the desire to move forward on a great new opportunity.

About the Author

David Castro often writes articles about Merchant Cash Advance and Small Business Loans for Merchant Resources International - To Learn more Visit Us at http://www.cashprior.com.

Article Source: Content for Reprint

How to Finance your Franchise Business Opportunity

2008-09-29T20:31:00.000-06:00

You have found the best franchise for you and are really excited about its future and your new business. However, how are you going to pay for it? Many franchises require a significant investment and a large amount of liquid money that many individuals don't have. Fortunately, there are a lot of financing options available to help you finance your franchise business opportunity.

Please keep in mind, however, that you should consider financing your franchise before you actually get your heart set on a particular franchise. The reason why is that financing can be a challenge and is the most important thing you should consider before actually opening a franchise. So, spend some time researching how to finance your franchise business opportunity to get a better understanding of how the entire process works.

Your Finances
First, you need to determine your financial situation. If you are not in a situation where you can afford to embark on a new business opportunity that may have cash flow issues in the beginning, then you should reconsider buying a franchise at this time. If you are current on all of your bills, have more holdings than debt, and make enough money to live on comfortably while saving then you may be prepared financially for a franchise. If not, then you might want to get your finances in order first. If you are doing well, and have some savings to invest, then a franchise may be a great opportunity for you.

Financing
There is a lot of information that you will need to provide in order to get financing. This includes your financial records from loans and debt payments to account balances and tax returns. Make sure all of this information is up to date and well organized before submitting it for financing approval. The more financial information you provide the easier it will be for lenders to determine your financial situation and subsequent financing options.

Financing by Franchisor
When you buy a franchise many times the franchisor will offer some percentage of financing to help you get started. The franchisor you are working with will heavily influence the financing options. Keep in mind, however, that just because you are buying a franchise and decide to go with franchisor financing the application process will not be any easier or more lenient. Also, you will need to invest some of your own money in the franchise because 100% franchise financing is highly uncommon.

Additional Financing
A Small Business Administration loan is a great option for additional financing for a franchise. Also, most banks are willing to finance successful franchises because they have a proven business model. Private investors may also be another option for financing your franchise opportunity.

About the Author
Find franchises, franchise opportunities and information for entrepreneurs at Franchise Gator.
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How to Manage Business Risks

2008-09-29T20:29:00.001-06:00

In spite of the fact that all small business owners face high risks, the risk factor in small and big businesses is the most overlooked area. Risk minimizing is crucial, even though taking risks in business and winning on risky gambles can be fun. It is the same in any venture that involves risk. Businesses both small and big need to deploy good risk management processes. They should have a system that manages business risks continuously through processes such as risk analysis and risk quantification.

When one does an internet search for risk management techniques and processes, there are a number of links given by search engines. Some of the typical subjects that result from such internet searches are insurance, OSHA standards, financial safeguards, issues related to environment protection and sustenance, government legalities, and computer back up systems. All of these are risk control systems and are specialized topics for risk control. However, they do not help a business to identify risks.

The Five Fold Risk Management System

For any risk management system to succeed, business owners and managers must take steps to ensure that everythinh involved in the risk management system is followed comprehensively. Risk management requires adherence to these five steps: identifying risks, quantifying them, making strategies to contain risks, formulating and implementing strategies conscientiously and monitoring risk containment tasks continuously.

Complicated though it may seem, for any business, especially small businesses, to manage risks well, they should follow the five-fold management system. A good starting place will be with the business plan itself. Reading through the business plans with a person who has a professional view will give one a comprehensive understanding of the risks involved. A good strategy will be to think of yourself as a bank official deciding to finance your business. You will then be able to identify financial risks associated with your business.

Although not every risky situation can be anticipated, it will be good for those concerned with risk management in their respective business to do a good brainstorming session. If you do this, there will be very few risk related business situations that will really surprise you.

There are many consultancy firms that you can go to for the risk management of your business. You may also obtain computer software solutions to identify business risks for your business and minimize them. Such software is a good support solution if you are doing risk management for yourself. This software is tailored to small and large businesses alike. It can be quite costly if you are outsourcing your risk management solutions.

About the Author
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com.

Working Capital Strategies for Business Cash Advances

2008-09-29T20:25:00.002-06:00

The current chaos in financial markets has changed how merchant cash advances should be evaluated. The use of credit card factoring and credit card processing to obtain working capital financing has recently become a more viable commercial funding strategy. Although this approach for securing business cash advances has been available, businesses historically seemed to prefer using other financing sources to get needed funds. While there are still other small business cash options which should be considered, the practical reality is that the choices available have changed dramatically for most business owners.

Recent changes in most commercial finance programs have resulted in many businesses scrambling to locate new sources for working capital and commercial loans. What has changed to make business cash advances a more feasible option for small business financing? Here are four of the primary reasons for a changing environment where business loans are involved.

First, the availability of unsecured lines of credit has all but disappeared for most small businesses. This was a favored method of business financing for years and will be sorely missed by many.

Second, in the recent past many business owners have probably used home equity credit lines to obtain needed cash quickly and simply. Most banks have reduced or eliminated these home equity loans in response to a nationwide residential funding crisis during the past year or so.

Third, banks are increasingly insisting on more collateral for their working capital loans and other commercial loans. For many business owners, providing additional collateral is not a feasible alternative.

Fourth, a growing number of local and regional banks are exiting the commercial lending business. In some cases, the business lending focus has shifted to larger businesses with long-term ties to a bank. This has produced an immediate and negative impact on relatively new and small businesses which especially need more working capital help in a challenging economic environment.

The four significant business financing trends noted above have resulted in a practical need for most business owners to now look much more actively at business cash advance programs. With such financing, businesses can obtain working capital cash based upon their credit card processing activity during the past six to twelve months.

Are there problems or pitfalls with this approach to obtaining small business cash? There are definitely problems to avoid with this specialized version of working capital financing. In fact I have prepared a number of special reports on this specific issue.

One major pitfall of business cash advances is the presence of a growing number of seemingly predatory lenders. These lending groups typically have one or more distinguishing negative characteristics.

One of these negative attributes is the apparent urgency by the lender to change the credit card processor used by a business. While there will always be legitimate reasons to consider changing the credit card processing arrangement, it should never be the first priority in a business cash advance program. If there is a rush to do so by the lender, it is probably due to a misguided attempt to obtain processing fees even if they are unable to provide a working capital advance.

Another negative characteristic is misrepresentation about how quickly business cash advances will be provided. While legitimate funding can typically be obtained in a month or less, business owners should be skeptical of agents who suggest that financing is routinely available in a week or less.

How can these seemingly predatory commercial lenders be avoided? Perhaps the most pragmatic solution for avoiding entanglements with one of these questionable lending sources is to have a lengthy conversation with a prospective lender prior to taking any action. Certainly it is especially unwise for a business owner to submit an online working capital cash application without having such a detailed discussion.

About the Author
Steve Bush is a working capital financing expert - avoid mistakes with business cash advances and small business mortgages - ask about strategies for commercial loans at => AEX Commercial Financing Group

Business Loans and the Best Time to Apply.

2008-09-29T19:39:00.001-06:00

Every business, small and large, will sooner or later require outside financing or some form of business loan in order to stay in business or to meet the demands of growth and expansion. In most cases business loans will come from a regular commercial bank but other institutions offering business loans include credit unions, savings and loans companies and investment companies.

If your business has been in operation for a number of years it is usually easier to arrange business loans. That's because you have already proved the viability of your enterprise and probably have established some form of relationship with your bank or credit union to manage your accounts payable and accounts receivable. But even if you are just starting out it is still possible to obtain business loans to get your business off on the right foot.

Your first step to obtaining business loans is to prepare a business case for the bank or lending institution to review. This will normally include your projected revenues and expenditures, the investments that you and your colleagues have already made in the business, and a description of the market conditions and operating milieu of your business enterprise. This will also allow you to consider and reconsider all possible sources of financing for your business and how much or how little of a business loan you may require.The second step to getting business loans is to ensure that your business and personal finances are in order. In the case of your business that might mean reviewing your supplier payment records in order to ensure that you do not have any outstanding or overdue accounts. Or at least have an arrangement with your suppliers and creditors to resolve them. On the personal finance side you have to remember that the bank likes to lend money to people and not to corporate entities.

Before approving any business loans most banks and financial institutions will do a credit check on the owners or principals of the business to see if there is a pattern or repaying your personal debts. This check is often called the creditworthy check and almost all lenders will carry out this activity before issuing any business loans.

Banks are a little reluctant to easily lend money to businesses in the form of business loans because there is an element of added risk to this type of lending activity. But once they can be convinced of the on-going viability of the business and the ability of the business to repay the business loans they are usually happy to oblige. Getting business loans may never be easy but if you do your homework in advance of approaching your bank or lender your chances of success will be greatly increased.

About the Author
David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com

Ethanol plant funding, JV partnerships for solar, wind farms, biodiesel refineries.

2008-09-29T19:09:00.003-06:00

We offer JV funding for alternative energy projects up to 100%

Funding for wind power, solar energy, wave energy, geothermal & other alternative energy projects into the billions.

JV, debt, or debt/equity combos. Minimum 100 million.

Green Projects Financing
Alternative Energy Project Funding
MSW
Biogas
Biomass
Biofuel
Large Solar Energy Projects
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Ethanol Plants
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Let me know if you have appropriate scenarios, or require further information.

jon@commercialfundsonline.com
jbullman2@bresnan.net for email with attachments

Asset Based Lending, Gaining Popularity Amongst Canandian Industries.

2008-06-24T21:23:00.001-06:00

Asset based lending in a layman's language refers to securing a loan against pledging an asset engaged in the business. It is a straightforward process of correlating the borrowing firm's assets to its liquidity requirements. Revenue generation via asset based lending made its foray into the Canadian markets roughly 18 to 19 years ago in order to meet the growing capital requirements of Canadian industries to keep the business running in a smooth fashion.

This form of asset based financing is slowly and gradually gaining momentum in the Canadian markets since its introduction. The usual operating loans offered to business units by the banks required the cumbersome task of providing cash flow projections, balance sheet and equity ratios etc, to procure loans. The capital offered by the traditional banks also was just between 50% and 75% of the total value of the asset. This is comparatively much lower than what asset based lending firms offer to the borrowing firm. Thus, operating loans based on utilizing the assets as collaterals is increasing in popularity among Canadian industries in the recent times.

Asset based lending firms provide finance loans and credit lines ranging from $ 1 million to $ 1 billion, in order to cater to the different types of borrowing requirements, like cross- border financing, debt restructuring, strategic acquisitions, special situations funding, funds for buyouts (leveraged and management) etc. Another reason for the growing popularity of the funding provided by asset based lenders is the relaxed eligibility standards for borrowing firms. A firm that is not reaping profits currently or even a firm that has a low net worth can also create cash flow through this form of commercial financing.

The basic requirements of an asset based lending firm to extend working capital are tangible assets that can be used as collaterals and a competent management that can capitalize on its assets for revenue generation. The assets usually used as collaterals against which a loan is secured may include the accounts receivables, letters of credit inventories, purchase orders and fixed assets like real estate, machinery, equipments furniture, vehicles etc. Most types of industries like import export firms, service providers, retailers, wholesalers, distributors and manufacturing units etc all kinds of business units have the potential eligibility of securing an asset based loan.

Asset based lending may prove to be an advantageous financing solution for firms having low operating margins and for firms having a seasonal or cyclical business. It also allows the firm to bring in additional cash flow in order to capitalize on the potential growth opportunities. It also enables a firm to increase liquidity without the advent of an equity partner. Firms that have greater collaterals certainly have greater flexibility by adopting the asset based financing model as compared to the cash flow credit model. Due to the additional revenue, it helps in increasing the focus of the firms towards business development activities.

In spite of the required daily or weekly reports of the collaterals and difficult modes of collection by the asset based lending firms, this form of financing is enjoying high ratings in the operating loans business. Due to the many advantages, asset based lending offers funding solutions to the growing Canadian industry.

Author Resource:-> Accounts Receivable Financing can help your business grow and by solving cash flow problems. The Internal Revenue Service (IRS) has a guide on what defines an Accounts Receivable Financing Company. To receive a quick quote visit this website at: http://www.factorquote.com

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Getting Commercial Real Estate Loans

2008-06-24T21:13:00.001-06:00

Loans for small to medium-sized investment requirements are offered by several lending firms. The loan amounts to $500,000 - $5,000,000 and are 1%-3% lesser than the interest rates offered by traditional lenders. On top of this type of loan, there are also other loan packages that investors can make use of for their different business requirements.

The Security Imposed on Loans

Business loans have a varierty of functions like purchasing business premises, expanding business boundaries, developing property and investing in commercial or residential properties. Negotiations on the kind of security pledged to the loan are entertained for the sole purpose of letting the borrower get the most out of his/her loan.

Non-traditional lenders avoid the red tape and tedious documentation that prolongs the loan application process, and whether you are getting a small or a big loan, you will get the same fast and dependable service.

Banks and other traditional lending firms offer a uniform process for refinancing and getting a mortgage. On the contrary, in commercial loans, lenders are very particular with the value of the collateral rather than your credit history.

If you?re applying for a commercial loan, the accepted security is a commercial real estate. The asset should be in good condition, otherwise, you?ll have to pay a larger downpayment or be disqualified for an apartment loan, while lenders evaluate the loan amount using the loan-to-value ratio.

The Buyer-Seller Relationship

The two parties involved in commercial real estate loans are the buyers and sellers. For buyers, they should first look around and seek for the best property that will give top value of their money. On the contrary, the sellers should ascertain that the property for sale is in good condition and that all its paperworks are available for future use.

When purchasing a property, buyers assess its location and condition. They want ease-of-access and less traffic because they do not want to incur additional travel expenses when managing the property and they want to ensure that possible customers would not have difficulty getting to the place. Good condition is essential as the contrary would mean additional expenses to take care of major repairs.

Loan-to-Value Ratio

The loan amount is determined using the loan-to-value (LTV) ratio. This value is a percentage of the collateral?s quoted value. For example, if a borrower puts in a property with an appraised value of $180,000, he/she can loan up to $150,000.

The LTV ratio is neagatively proportional to the risk of the borrower. This means that high risk borrowers, or those with not-so-good credit standing, are given lower LTV ratios. A bigger ratio protects lenders from the pressures of foreclosures. Some may also be granted with a full ratio, however, this is only in isolated cases.

In commercial loans, lenders evaluate the borrower?s credit-worthiness, steadiness and type of the business, as well as the nature of the property. Lenders such as the NCF make the loans procedure less taxing than most.

Author Resource:-> Get the right commercial real estate loans for your multifamily apartment loans or mobile home park loans. NationalCommercialFunding.com offer perfect loan solutions for different needs.

Article From Article Directory

Qualifying For A Commercial Loan Is Easier Than You Think

2008-06-24T21:08:00.005-06:00

Are you in the market for a commercial loan? A commercial loan is a tool that opens up different opportunities to develop an individual's investment portfolio. If you are a smart investor, you will look for opportunities to have your money work for you and give you additional income through property rentals, hotels, commercial office space, etc.

If you are a beginner, you need not worry. You can start small by leasing an apartment complex in or close to your neighborhood. This is an easier option for beginners since you are close to the property and already familiar with the area. Once you have mastered the art of owning and managing your own rental property, you will be much more prepared and qualified to invest in properties that are outside of your area or even outside the state. Some investors even choose to purchase rental properties that are outside the country.

Qualifying for a business or commercial loan is easier than one might think. Even though housing prices have increased steadily over the last few years, people are still pulling out money to invest in real estate. You need to be careful though, some banks are becoming stingier and much more careful of whom they will lend to and have strict pre-requisites for applicants.

When you begin the loan process, your broker will provide you with an estimate of the value of the asset that you wish to obtain a commercial loan for. Before a loan is approved, the bank or lender will demand more information about the investment property. They will wish to know where the property is located, the nature of the property, and the amount of revenues generated over the last two years. They will also want to know how the property is going to be used. A lot of people, who purchase properties as an investment, do so dishonestly. The lenders are cracking down on this a lot lately.

If you are detailed and comprehensive with the information that you provide the lender, your chances will greatly increase that the commercial loan will be approved.

There are some things that you can do to in advance before asking for money from a bank or lender. Here are just a few of these,

- You must have a clean credit record

- Keep all your asset information up to date and current

- Shop around on lending rates

- Learn how to negotiate

- Make sure that you do a background check on any property that you are interested in.

- Create and have a business plan readily available

You have an opportunity of generating a large amount of passive income by investing in real estate. Commercial loans are readily available for individuals such as yourself if seek them out. As an investor seeking to expand a portfolio, now is the time to invest.

Author Resource:-> Bart Icles is an expert when it comes to commercial loans, hotel loans, and apartment loans. Visit National Commercial Funding today for more information or to get started! You can also check out poor credit student loans if you are in need of a student loan.

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