Posts Tagged ‘Business Financing’
Business Funding, Where To Go?
Michael Lewis asked:
The rate of interest on personal loans can be fixed or variable. In case of a fixed rate personal loan, the rate of interest remains the same throughout the loan period and consequently, the amount of monthly payments also remains the same.
Loan market in the UK is swamped with enormous number of loan options. Different loans have been designed keeping in mind the diverse needs and expectations of the UK residents.
The payday loan is credited directly into the bank account of the borrower. They may not have been able to maintain the desired gap between application and approval because of the uncertain nature of the expense for which the loan is needed. In spite of this, the borrower is given an instant loan, while the service charges are upped.
You can use a personal loan for any of your miscellaneous needs. You can even use a personal loan to make daily purchases. However, you must avoid using personal loans to pay for daily expenses.
Business Funding
Every business needs money at one time or another. The process of obtaining financing can be daunting and the chances of success limited if it is approached in a disorganized or haphazard way. Lenders are conservative critters; however it is important to understand that it is their job to lend money, and they are happy to do so if their risk is reasonable. The chances of obtaining a business loan are greatly enhanced if you adhere to the following procedure.
KNOW WHAT YOU NEED
Understand how you intend to use business financing, how much funding you need and how you intend to repay the loan. Be able to communicate this clearly and confidently with prospective lenders.
UNDERSTAND YOUR CURRENT SITUATION
If you are an existing business, are you profitable, and does your balance sheet have positive equity? What does your credit look like? Have a clear understanding of any existing liens and lien priority. Know your credit score and answers to derogatory credit issues (liens, judgments, slow pays, collection actions) before presenting your application. If there have been credit, profitability or equity issues in the past, present a credible argument as to why these issues have been resolved or how this loan will change this situation.
KNOW YOUR OPTIONS
All lending is critiqued from a risk standpoint. Certain levels of risk will qualify for certain types of financing. The level of risk is reflected in the cost of the financing. The more secure a lender’s money is, the less it costs you. Get creative. Financing takes many forms, and is available from a wide range of sources.
Standard (conventional) bank financing usually offers the best interest rates, however it is the most difficult to qualify for. These loans appear as a long-term liability on the business balance sheet. Conventional loans are available through banks and other lending institutions and can be guaranteed in whole or part by the SBA.
Revolving Lines of Credit are another form of business financing. This type of loan is secured by accounts receivable or inventory and is available from a bank or an Asset Based Lender. Credit cards are a form of revolving line of credit. An Asset-Based Line of Credit (ABL) is considered alternative financing and is available to borrowers who are too highly leveraged for a bank.
Unsecured loans, on the other hand, require no collateral but almost always have a higher interest rate than secured loans.
Some of these like the credit check are necessary for determining the reliability of the borrower.
Personal loans are loans taken by people for personal reasons. This might sound as a vague definition of personal loans.
Consolidation loans have loan terms ranging from 10 – 30 years. A good consolidation loan would be that which fits beautifully in your financial situation. Consolidation loans are advantageous to almost anyone because of the ease with which you can customize them to your financial stability and your choice.
Secured loan helps borrowers in making the best use of the equity stored in his or her property that helps him in borrowing a larger amount of loan and that too for a longer loan term.
Real Property, Equipment Leases and Notes are another form of business financing. In these contracts the collateral for the loan is the property or equipment itself. When there is no outstanding balance owed on the asset, the property or equipment could be used in a Sale-Leaseback transaction. Here, the asset is sold to the lender for cash, and the borrower leases the property from the lender until the loan is paid.
Landlords can be a source of financing. It is not uncommon for a landlord to contribute dollars or rent concessions to the development of a tenant’s space. For this loan, the landlord may require a Percentage of Gross Sales Clause in the lease as repayment. Extended vendor terms for purchase of product may provide short-term operating capital loans.
In the event that additional credit strength is required, loan guarantors or borrowing someone’s credit may help the borrower qualify for less expensive financing. Be flexible. Your final package may be comprised of several lending solutions
PRESENT A CLEAR AND UNDERSTANDABLE PROPOSAL Lenders need to know who you are personally, professionally and financially. The lender needs to evaluate Income Tax returns (Corporate and Personal), financial statements (income statement and balance sheet) and a cash flow projection. The balance sheet has to look a specific way. The Current Ratio should be at least 1:1, and the Debt to Equity Ratio should be at least 4:1.
Be specific as to how the money is going to be used and how it will be paid back. Lenders want to know what is securing their debt. Lenders evaluate the quality of the collateral, and want to insure that it is adequate to secure the debt in case of default. A secondary source of repayment is required prior to granting standard financing. The personal guarantee of the borrower is often required. In some situations, a lender may seek secondary collateral. Secondary collateral is simply some other asset in which you have equity or ownership, i.e. equipment, property, inventory, notes. Business funding is not difficult if the borrower is creative and realistic. Know how much money you need and how you are going to use it. Be prepared to defend your needs and anticipate the lender’s questions. In the event that a lender cannot grant your request, perhaps it is the way a loan is packaged. Find a lender who is willing to make recommendations that will help you find financing. A good lender will tell you quickly if they can help you or not. If an intelligent and organized package is presented, a timely response is warranted.
The loan can be repaid over any term between 5 and 25 years, depending on your available income and the amount of equity in the property that is to provide the security for the loan.
Debt is a hard thing to live with, reduce debts today! Online processing of loans is of special help in making instant loans possible. Online processing of loans does not simply mean using a computer for sorting and arranging data. Repayments options have to be studied carefully and understood before you apply for secured personal loans. Most people repay their secured personal loans before time and usually early repayments carry repayment penalties. Rate of interest very appropriately depends on the loan amount, repayment term and personal condition.
There are lenders in the UK who can arrange loan for you and that too at a lower rate of interest.
The Federal Direct Unsubsidized Stafford/Ford Loan is a direct loan the government charges you interest while you are in school.
Get Business Loans Now
The rate of interest on personal loans can be fixed or variable. In case of a fixed rate personal loan, the rate of interest remains the same throughout the loan period and consequently, the amount of monthly payments also remains the same.
Loan market in the UK is swamped with enormous number of loan options. Different loans have been designed keeping in mind the diverse needs and expectations of the UK residents.
The payday loan is credited directly into the bank account of the borrower. They may not have been able to maintain the desired gap between application and approval because of the uncertain nature of the expense for which the loan is needed. In spite of this, the borrower is given an instant loan, while the service charges are upped.
You can use a personal loan for any of your miscellaneous needs. You can even use a personal loan to make daily purchases. However, you must avoid using personal loans to pay for daily expenses.
Business Funding
Every business needs money at one time or another. The process of obtaining financing can be daunting and the chances of success limited if it is approached in a disorganized or haphazard way. Lenders are conservative critters; however it is important to understand that it is their job to lend money, and they are happy to do so if their risk is reasonable. The chances of obtaining a business loan are greatly enhanced if you adhere to the following procedure.
KNOW WHAT YOU NEED
Understand how you intend to use business financing, how much funding you need and how you intend to repay the loan. Be able to communicate this clearly and confidently with prospective lenders.
UNDERSTAND YOUR CURRENT SITUATION
If you are an existing business, are you profitable, and does your balance sheet have positive equity? What does your credit look like? Have a clear understanding of any existing liens and lien priority. Know your credit score and answers to derogatory credit issues (liens, judgments, slow pays, collection actions) before presenting your application. If there have been credit, profitability or equity issues in the past, present a credible argument as to why these issues have been resolved or how this loan will change this situation.
KNOW YOUR OPTIONS
All lending is critiqued from a risk standpoint. Certain levels of risk will qualify for certain types of financing. The level of risk is reflected in the cost of the financing. The more secure a lender’s money is, the less it costs you. Get creative. Financing takes many forms, and is available from a wide range of sources.
Standard (conventional) bank financing usually offers the best interest rates, however it is the most difficult to qualify for. These loans appear as a long-term liability on the business balance sheet. Conventional loans are available through banks and other lending institutions and can be guaranteed in whole or part by the SBA.
Revolving Lines of Credit are another form of business financing. This type of loan is secured by accounts receivable or inventory and is available from a bank or an Asset Based Lender. Credit cards are a form of revolving line of credit. An Asset-Based Line of Credit (ABL) is considered alternative financing and is available to borrowers who are too highly leveraged for a bank.
Unsecured loans, on the other hand, require no collateral but almost always have a higher interest rate than secured loans.
Some of these like the credit check are necessary for determining the reliability of the borrower.
Personal loans are loans taken by people for personal reasons. This might sound as a vague definition of personal loans.
Consolidation loans have loan terms ranging from 10 – 30 years. A good consolidation loan would be that which fits beautifully in your financial situation. Consolidation loans are advantageous to almost anyone because of the ease with which you can customize them to your financial stability and your choice.
Secured loan helps borrowers in making the best use of the equity stored in his or her property that helps him in borrowing a larger amount of loan and that too for a longer loan term.
Real Property, Equipment Leases and Notes are another form of business financing. In these contracts the collateral for the loan is the property or equipment itself. When there is no outstanding balance owed on the asset, the property or equipment could be used in a Sale-Leaseback transaction. Here, the asset is sold to the lender for cash, and the borrower leases the property from the lender until the loan is paid.
Landlords can be a source of financing. It is not uncommon for a landlord to contribute dollars or rent concessions to the development of a tenant’s space. For this loan, the landlord may require a Percentage of Gross Sales Clause in the lease as repayment. Extended vendor terms for purchase of product may provide short-term operating capital loans.
In the event that additional credit strength is required, loan guarantors or borrowing someone’s credit may help the borrower qualify for less expensive financing. Be flexible. Your final package may be comprised of several lending solutions
PRESENT A CLEAR AND UNDERSTANDABLE PROPOSAL Lenders need to know who you are personally, professionally and financially. The lender needs to evaluate Income Tax returns (Corporate and Personal), financial statements (income statement and balance sheet) and a cash flow projection. The balance sheet has to look a specific way. The Current Ratio should be at least 1:1, and the Debt to Equity Ratio should be at least 4:1.
Be specific as to how the money is going to be used and how it will be paid back. Lenders want to know what is securing their debt. Lenders evaluate the quality of the collateral, and want to insure that it is adequate to secure the debt in case of default. A secondary source of repayment is required prior to granting standard financing. The personal guarantee of the borrower is often required. In some situations, a lender may seek secondary collateral. Secondary collateral is simply some other asset in which you have equity or ownership, i.e. equipment, property, inventory, notes. Business funding is not difficult if the borrower is creative and realistic. Know how much money you need and how you are going to use it. Be prepared to defend your needs and anticipate the lender’s questions. In the event that a lender cannot grant your request, perhaps it is the way a loan is packaged. Find a lender who is willing to make recommendations that will help you find financing. A good lender will tell you quickly if they can help you or not. If an intelligent and organized package is presented, a timely response is warranted.
The loan can be repaid over any term between 5 and 25 years, depending on your available income and the amount of equity in the property that is to provide the security for the loan.
Debt is a hard thing to live with, reduce debts today! Online processing of loans is of special help in making instant loans possible. Online processing of loans does not simply mean using a computer for sorting and arranging data. Repayments options have to be studied carefully and understood before you apply for secured personal loans. Most people repay their secured personal loans before time and usually early repayments carry repayment penalties. Rate of interest very appropriately depends on the loan amount, repayment term and personal condition.
There are lenders in the UK who can arrange loan for you and that too at a lower rate of interest.
The Federal Direct Unsubsidized Stafford/Ford Loan is a direct loan the government charges you interest while you are in school.
Get Business Loans Now
Construction Financing and Commercial Loans
Stephen Bush asked:
Commercial construction financing and commercial real estate loans are presenting a number of new challenges for commercial borrowers. As a result, small business owners should anticipate that they are likely to encounter some new but generally avoidable problems when they are seeking working capital funding and commercial mortgages.
There have always been complex problems for business owners to avoid when seeking commercial loans. By most accounts, these difficulties are now expected to multiply because we appear to be entering a period which will be characterized by even more uncertainties in the economy. Prior standards for commercial mortgages are likely to change suddenly and with little advance notice by lenders if the current financial turmoil continues.
This article will evaluate why commercial construction loans have become harder to obtain and will discuss possible commercial finance funding solutions. It is much more likely that borrowers will need to look beyond their local area for business financing help because of current economic uncertainties in combination with less capital available for commercial mortgages in general and construction financing in particular. In many areas of the United States, virtually all business construction funding sources are effectively inactive at this time in addressing new loan requests.
Construction loans were generally considered to be riskier than other commercial financing by most lenders even before business finance funding options became more limited recently. For a commercial lender, the most significant risk factors for commercial construction financing usually include the following: (1) a commercial property cannot produce revenues which will be used to repay a loan until the property is completed and occupied; (2) a substantial risk factor is the possibility for contractor liens; and (3) many commercial construction projects take more time to complete than originally projected and/or exceed initial cost estimates. Due to widespread business losses in the construction industry, the risk of contractor liens is a major concern for commercial lenders. In any event, current delinquencies in loan payments for commercial construction financing are running well above normal.
Construction financing for homebuilders has always been viewed separately by lenders because the eventual owners of single-family homes are individuals rather than businesses. From a commercial lending perspective, it is likely that the current difficulties seen in residential construction are indirectly impacting the availability of construction funding for commercial properties because the potential for contractor liens incurred during residential projects can quickly reduce the financial stability of contractors involved in both residential and commercial construction projects. This is a further reason why lenders are increasingly focusing on the risk of contractor liens as a rationale for providing less construction financing.
The feasibility of real estate investments has traditionally included an enduring theme of “location, location and location” which reflects the importance of a specific locale for investing. This is still an important factor when lenders evaluate the prospects for commercial real estate loans involving both existing commercial properties and new construction. A lender is likely to be most comfortable with a stable to growing revenue stream for a business which will in turn result in a stable to growing property valuation, thus preserving collateral for the commercial mortgage loan.
Although there are significant regional variations, we are witnessing decreases in both commercial and residential property values throughout the United States for the first time in several years. A severe recession will result in decreasing income for many businesses over an extended period of time, and it is very difficult for either lenders or borrowers to project when this downward trend will reverse.
Given the difficulty of arranging financing based on location, using non-local lenders can be a practical solution for commercial financing involving both existing commercial properties and new construction. Small business owners should seek straightforward advice from a commercial loans expert who can provide effective strategies for changing and difficult business finance funding situations, especially in light of the challenging commercial borrowing climate prevailing currently.
Commercial construction financing and commercial real estate loans are presenting a number of new challenges for commercial borrowers. As a result, small business owners should anticipate that they are likely to encounter some new but generally avoidable problems when they are seeking working capital funding and commercial mortgages.
There have always been complex problems for business owners to avoid when seeking commercial loans. By most accounts, these difficulties are now expected to multiply because we appear to be entering a period which will be characterized by even more uncertainties in the economy. Prior standards for commercial mortgages are likely to change suddenly and with little advance notice by lenders if the current financial turmoil continues.
This article will evaluate why commercial construction loans have become harder to obtain and will discuss possible commercial finance funding solutions. It is much more likely that borrowers will need to look beyond their local area for business financing help because of current economic uncertainties in combination with less capital available for commercial mortgages in general and construction financing in particular. In many areas of the United States, virtually all business construction funding sources are effectively inactive at this time in addressing new loan requests.
Construction loans were generally considered to be riskier than other commercial financing by most lenders even before business finance funding options became more limited recently. For a commercial lender, the most significant risk factors for commercial construction financing usually include the following: (1) a commercial property cannot produce revenues which will be used to repay a loan until the property is completed and occupied; (2) a substantial risk factor is the possibility for contractor liens; and (3) many commercial construction projects take more time to complete than originally projected and/or exceed initial cost estimates. Due to widespread business losses in the construction industry, the risk of contractor liens is a major concern for commercial lenders. In any event, current delinquencies in loan payments for commercial construction financing are running well above normal.
Construction financing for homebuilders has always been viewed separately by lenders because the eventual owners of single-family homes are individuals rather than businesses. From a commercial lending perspective, it is likely that the current difficulties seen in residential construction are indirectly impacting the availability of construction funding for commercial properties because the potential for contractor liens incurred during residential projects can quickly reduce the financial stability of contractors involved in both residential and commercial construction projects. This is a further reason why lenders are increasingly focusing on the risk of contractor liens as a rationale for providing less construction financing.
The feasibility of real estate investments has traditionally included an enduring theme of “location, location and location” which reflects the importance of a specific locale for investing. This is still an important factor when lenders evaluate the prospects for commercial real estate loans involving both existing commercial properties and new construction. A lender is likely to be most comfortable with a stable to growing revenue stream for a business which will in turn result in a stable to growing property valuation, thus preserving collateral for the commercial mortgage loan.
Although there are significant regional variations, we are witnessing decreases in both commercial and residential property values throughout the United States for the first time in several years. A severe recession will result in decreasing income for many businesses over an extended period of time, and it is very difficult for either lenders or borrowers to project when this downward trend will reverse.
Given the difficulty of arranging financing based on location, using non-local lenders can be a practical solution for commercial financing involving both existing commercial properties and new construction. Small business owners should seek straightforward advice from a commercial loans expert who can provide effective strategies for changing and difficult business finance funding situations, especially in light of the challenging commercial borrowing climate prevailing currently.
The Potential for Malpractice With Commercial Loans
Stephen Bush asked:
Malpractice in any activity typically occurs when there is a serious failure of professional duty. With borrowers seeking small business loans and commercial real estate financing, malpractice can occur with both commercial lenders and brokers for commercial loans.
During the opening segment of the television series Hill Street Blues, Sergeant Phil Esterhaus usually ended with a suggestion (let’s be careful out there) that will also be helpful in avoiding malpractice situations involving working capital financing. Although that is a worthy goal, the actual practice of avoiding problems with business loans is somewhat difficult and complex. One of our most effective solutions for this dilemma has been to openly acknowledge that such difficulties exist and simultaneously provide detailed advice and strategies.
We have published a special report addressing one of the biggest recent causes of malpractice involving business financing and commercial real estate loans. Most commercial borrowers are probably aware that chaotic conditions started impacting residential real estate beginning about 12 months ago. Because their accustomed level of residential financing activities have all but disappeared, former residential brokers and lenders are in many cases now executing business loans. As you might imagine, this can result in problems for commercial borrowers.
Inexperience involving commercial loans is never a good thing when you are describing a commercial lender or broker. In almost all cases the complexity of business loans combined with inexperience by their financing advisors can result in a formula for malpractice.
Even though a broker or lender was superb at executing residential mortgage financing, please do not assume that they will also be good (or even marginally capable) when it comes to commercial mortgages, working capital financing or small business loans. We have prepared a series of reports which focus on over twenty critical differences between residential financing and business financing. It really does take several years to be effective in finalizing commercial loans.
Another common source of malpractice with working capital financing is currently seen with many agents for business cash advance programs. The typical agent acts as a representative of a credit card receivables financing provider and does not comprehend the complexities of business loans. They are focused on only the narrow but important service that they provide and are not capable of assisting with other forms of business financing.
Although it might not be obvious to most business owners, the malpractice potential with business cash advances is also directly related to the first example described above involving inexperienced brokers and lenders. Throughout the U.S. we have seen call centers switching from a focus on residential financing to merchant cash advances. Once again inexperience is never a good thing when complicated working capital management services are involved.
Specialized commercial real estate loans and SBA loans represent the final example of malpractice potential. Although many commercial lenders seem to suggest that they can do SBA financing, in reality very few do what they claim. One major business financing lender ceased most business operations during the past year because of apparently fraudulent SBA loan activities.
Specialized commercial property such as funeral homes, gas stations, bowling alleys and golf courses have always been recognized as problematic for commercial loans. As a relevant example, a national lender for funeral home loans is now the target of litigation due to commercial funding activities that almost anyone would view as irresponsible.
Commercial borrowers should rightfully conclude that an important step in avoiding potential malpractice circumstances might simply be to avoid certain lenders and brokers. We would agree wholeheartedly, and in fact published a special report some time ago dealing with the need to avoid problem brokers and commercial lenders.
No matter how serious the three malpractice examples might be, they should be considered as the tip of the iceberg when looking at the overall obstacles for working capital loans and business loans. Our advice is meant to reinforce the importance and value of being prudent in pursuing commercial loans.
Malpractice in any activity typically occurs when there is a serious failure of professional duty. With borrowers seeking small business loans and commercial real estate financing, malpractice can occur with both commercial lenders and brokers for commercial loans.
During the opening segment of the television series Hill Street Blues, Sergeant Phil Esterhaus usually ended with a suggestion (let’s be careful out there) that will also be helpful in avoiding malpractice situations involving working capital financing. Although that is a worthy goal, the actual practice of avoiding problems with business loans is somewhat difficult and complex. One of our most effective solutions for this dilemma has been to openly acknowledge that such difficulties exist and simultaneously provide detailed advice and strategies.
We have published a special report addressing one of the biggest recent causes of malpractice involving business financing and commercial real estate loans. Most commercial borrowers are probably aware that chaotic conditions started impacting residential real estate beginning about 12 months ago. Because their accustomed level of residential financing activities have all but disappeared, former residential brokers and lenders are in many cases now executing business loans. As you might imagine, this can result in problems for commercial borrowers.
Inexperience involving commercial loans is never a good thing when you are describing a commercial lender or broker. In almost all cases the complexity of business loans combined with inexperience by their financing advisors can result in a formula for malpractice.
Even though a broker or lender was superb at executing residential mortgage financing, please do not assume that they will also be good (or even marginally capable) when it comes to commercial mortgages, working capital financing or small business loans. We have prepared a series of reports which focus on over twenty critical differences between residential financing and business financing. It really does take several years to be effective in finalizing commercial loans.
Another common source of malpractice with working capital financing is currently seen with many agents for business cash advance programs. The typical agent acts as a representative of a credit card receivables financing provider and does not comprehend the complexities of business loans. They are focused on only the narrow but important service that they provide and are not capable of assisting with other forms of business financing.
Although it might not be obvious to most business owners, the malpractice potential with business cash advances is also directly related to the first example described above involving inexperienced brokers and lenders. Throughout the U.S. we have seen call centers switching from a focus on residential financing to merchant cash advances. Once again inexperience is never a good thing when complicated working capital management services are involved.
Specialized commercial real estate loans and SBA loans represent the final example of malpractice potential. Although many commercial lenders seem to suggest that they can do SBA financing, in reality very few do what they claim. One major business financing lender ceased most business operations during the past year because of apparently fraudulent SBA loan activities.
Specialized commercial property such as funeral homes, gas stations, bowling alleys and golf courses have always been recognized as problematic for commercial loans. As a relevant example, a national lender for funeral home loans is now the target of litigation due to commercial funding activities that almost anyone would view as irresponsible.
Commercial borrowers should rightfully conclude that an important step in avoiding potential malpractice circumstances might simply be to avoid certain lenders and brokers. We would agree wholeheartedly, and in fact published a special report some time ago dealing with the need to avoid problem brokers and commercial lenders.
No matter how serious the three malpractice examples might be, they should be considered as the tip of the iceberg when looking at the overall obstacles for working capital loans and business loans. Our advice is meant to reinforce the importance and value of being prudent in pursuing commercial loans.
Plan B Contingency Financing for Commercial Loans
Stephen Bush asked:
cy planning (“always have a Plan B”) is likely to help small business owners avoid complex problems. But when it comes to commercial loans and commercial mortgages, working capital strategies often fail to include adequate attention to contingency plans and what can go wrong.
One of the most entertaining and effective depictions of contingency planning is a movie called “Rare Birds”. This movie stars William Hurt and includes variations of the line, “Always have a Plan B”. For any business owner who doubts the importance of contingency plans, the movie will provide an enlightening perspective.
The usefulness of a Plan B mentality is likely to be beneficial to many aspects of running a successful business. Contingency plans appears to be under-utilized when business owners seek new working capital funds via strategies such as commercial mortgages and business cash advances.
A major reason for this oversight is that many commercial borrowers probably assume that there are not effective alternatives to the business financing they are seeking. With this thinking, business owners might believe that it would not make sense to devote time to exploring a contingency finance plan. After watching the movie mentioned above, it will become much easier to understand at times like this that it is not a waste of time for businesses to “Always have a Plan B”.
In this regard, Plan B contingency commercial financing should be viewed as insurance to protect a business owner in the event that something goes wrong with their working capital management. A few examples are provided below.
First, a surprising number of local and regional banks have recently decided to pull the plug on future business financing in their lending portfolio. When they do so, very little advance notice has been provided in most instances. If a business has commercial loans or commercial mortgages with a regional or local lender, a Plan B should be developed for the contingency that alternative business loan arrangements could be needed in the near future.
Second, many small businesses have commercial loans that contain recall provisions that permit the lender to review the loan each year. Even though in this instance the commercial lender might continue a financing role for some businesses, they will in fact selectively eliminate what they consider to be marginal loans by use of the recall loan terms. If they do, the borrower will need to pay off the entire loan or refinance within a limited period of time. The loss of control by the borrower even though they might have been making timely payments is perhaps the most disturbing aspect of recall features. The best solution for avoiding this possibility is to review current business loans and explore Plan B refinancing options if recall terms are included.
Third, numerous prominent providers for business cash advances routinely make unrealistic promises about what they can do and how long it will take. Business owners should have thorough discussions with a potential business financing advisor to adequately prepare for this possibility. In this case the Plan B approach occurs prior to finance arrangements being finalized (unlike the first two examples in which financing was already in place).
Fourth, many lenders for SBA loans, business opportunity financing and commercial mortgage loans are frequently guilty of under-delivering and over-promising. Local and regional lenders seem to produce a disproportionate number of problems like this. Similar to the recommended approach for business cash advances, commercial borrowers should pursue Plan B contingency financing. The ideal timing to discuss alternative commercial financing options is before committing to a specific lender.
Finally, for the four examples noted above as well as the numerous other possibilities where contingency planning is appropriate for commercial loans and working capital loans, we do have a closing thought. “Always have a Plan B”.
Commercial Loans to 65% of Value
cy planning (“always have a Plan B”) is likely to help small business owners avoid complex problems. But when it comes to commercial loans and commercial mortgages, working capital strategies often fail to include adequate attention to contingency plans and what can go wrong.
One of the most entertaining and effective depictions of contingency planning is a movie called “Rare Birds”. This movie stars William Hurt and includes variations of the line, “Always have a Plan B”. For any business owner who doubts the importance of contingency plans, the movie will provide an enlightening perspective.
The usefulness of a Plan B mentality is likely to be beneficial to many aspects of running a successful business. Contingency plans appears to be under-utilized when business owners seek new working capital funds via strategies such as commercial mortgages and business cash advances.
A major reason for this oversight is that many commercial borrowers probably assume that there are not effective alternatives to the business financing they are seeking. With this thinking, business owners might believe that it would not make sense to devote time to exploring a contingency finance plan. After watching the movie mentioned above, it will become much easier to understand at times like this that it is not a waste of time for businesses to “Always have a Plan B”.
In this regard, Plan B contingency commercial financing should be viewed as insurance to protect a business owner in the event that something goes wrong with their working capital management. A few examples are provided below.
First, a surprising number of local and regional banks have recently decided to pull the plug on future business financing in their lending portfolio. When they do so, very little advance notice has been provided in most instances. If a business has commercial loans or commercial mortgages with a regional or local lender, a Plan B should be developed for the contingency that alternative business loan arrangements could be needed in the near future.
Second, many small businesses have commercial loans that contain recall provisions that permit the lender to review the loan each year. Even though in this instance the commercial lender might continue a financing role for some businesses, they will in fact selectively eliminate what they consider to be marginal loans by use of the recall loan terms. If they do, the borrower will need to pay off the entire loan or refinance within a limited period of time. The loss of control by the borrower even though they might have been making timely payments is perhaps the most disturbing aspect of recall features. The best solution for avoiding this possibility is to review current business loans and explore Plan B refinancing options if recall terms are included.
Third, numerous prominent providers for business cash advances routinely make unrealistic promises about what they can do and how long it will take. Business owners should have thorough discussions with a potential business financing advisor to adequately prepare for this possibility. In this case the Plan B approach occurs prior to finance arrangements being finalized (unlike the first two examples in which financing was already in place).
Fourth, many lenders for SBA loans, business opportunity financing and commercial mortgage loans are frequently guilty of under-delivering and over-promising. Local and regional lenders seem to produce a disproportionate number of problems like this. Similar to the recommended approach for business cash advances, commercial borrowers should pursue Plan B contingency financing. The ideal timing to discuss alternative commercial financing options is before committing to a specific lender.
Finally, for the four examples noted above as well as the numerous other possibilities where contingency planning is appropriate for commercial loans and working capital loans, we do have a closing thought. “Always have a Plan B”.
Commercial Loans to 65% of Value
Commercial Loans – How Long Should They Take?
Stephen Bush asked:
One of the most misunderstood aspects about commercial loans is how long they take to arrange. There are some types of commercial loans which can be obtained in just a few days while other business loans are likely to take up to 60 days or more.
The primary example of commercial loans that are likely to take the longest to arrange is a commercial real estate loan. Even with the quickest variation of a commercial mortgage, business owners should expect this to take 45 to 60 days (up to nine months is a possibility with some traditional banks for certain commercial mortgages). One aspect that causes this type of commercial loan to take so long is the requirement for a real estate appraisal. This requirement alone is responsible for 30-40 days of the commercial mortgage process. The example requiring up to nine months is likely to involve an environmental review and/or business plan, both of which add substantial costs as well as time to the commercial financing process. However, not all lenders will require either an environmental review or business plan, so business owners should inquire in advance about these extra requirements.
One of the quickest examples of business financing involves a business cash advance based on future credit card receipts (credit card receivables). This commercial financing can be arranged in just a few days and requires very little documentation except for credit card receipt information and is called credit card factoring. Like the example above, some lenders will require more documentation such as tax returns and financial statements. As a result for such lenders the timeline is likely to be several weeks instead of several days.
In both examples above, timing issues will be extended if the initial commercial loan attempt does not result in a successful outcome. Business owners need to realize that with relatively quick-funding possibilities as well as more time-consuming examples such as commercial mortgages, there might still be insurmountable obstacles which result in a declined commercial loan. Although there will frequently be other commercial financing options available even after a lender declines a commercial loan, such “false starts” will result in a more time-consuming process for the small business borrower.
In the end the commercial financing process will be as short as possible if a business borrower does the following before starting their commercial loan search:
(1) Determine whether they need long-term or short-term financing
(2) Perform a preliminary assessment of their cash needs, credit scores and borrowing power based on assets like credit card receivables and equity in commercial property
(3) Review potential lender requirements such as those mentioned above involving environmental reviews and business plans as well as other common lender requirements such as tax returns and financial statements
(4) Commercial borrowers should visit http://www.aexcommercialfinancing.com for an overview of strategies for avoiding problems commonly associated with commercial loans.
Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.
3 Day Approvals for Business Loans
One of the most misunderstood aspects about commercial loans is how long they take to arrange. There are some types of commercial loans which can be obtained in just a few days while other business loans are likely to take up to 60 days or more.
The primary example of commercial loans that are likely to take the longest to arrange is a commercial real estate loan. Even with the quickest variation of a commercial mortgage, business owners should expect this to take 45 to 60 days (up to nine months is a possibility with some traditional banks for certain commercial mortgages). One aspect that causes this type of commercial loan to take so long is the requirement for a real estate appraisal. This requirement alone is responsible for 30-40 days of the commercial mortgage process. The example requiring up to nine months is likely to involve an environmental review and/or business plan, both of which add substantial costs as well as time to the commercial financing process. However, not all lenders will require either an environmental review or business plan, so business owners should inquire in advance about these extra requirements.
One of the quickest examples of business financing involves a business cash advance based on future credit card receipts (credit card receivables). This commercial financing can be arranged in just a few days and requires very little documentation except for credit card receipt information and is called credit card factoring. Like the example above, some lenders will require more documentation such as tax returns and financial statements. As a result for such lenders the timeline is likely to be several weeks instead of several days.
In both examples above, timing issues will be extended if the initial commercial loan attempt does not result in a successful outcome. Business owners need to realize that with relatively quick-funding possibilities as well as more time-consuming examples such as commercial mortgages, there might still be insurmountable obstacles which result in a declined commercial loan. Although there will frequently be other commercial financing options available even after a lender declines a commercial loan, such “false starts” will result in a more time-consuming process for the small business borrower.
In the end the commercial financing process will be as short as possible if a business borrower does the following before starting their commercial loan search:
(1) Determine whether they need long-term or short-term financing
(2) Perform a preliminary assessment of their cash needs, credit scores and borrowing power based on assets like credit card receivables and equity in commercial property
(3) Review potential lender requirements such as those mentioned above involving environmental reviews and business plans as well as other common lender requirements such as tax returns and financial statements
(4) Commercial borrowers should visit http://www.aexcommercialfinancing.com for an overview of strategies for avoiding problems commonly associated with commercial loans.
Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.
3 Day Approvals for Business Loans
Commercial Loans and Fake Articles
Steve Bush asked:
The growing presence of fake articles about commercial loans and working capital financing should be a serious concern for commercial borrowers. We are referring to several inappropriate and unethical uses of internet content in which the website owner does not have permission to use the published information. At a minimum, a fictitious article about finance topics such as commercial mortgages and business cash advances is likely to result in confusion. In more extreme examples, incorrect business financing decisions might be based on inaccurate articles.
Unfortunately the trends described in this article can also be seen throughout the internet community for a wide variety of subjects such as credit card processing, real estate investments and business opportunity financing. Our focus will be on commercial financing because we have seen firsthand for many years how the growing practice of stealing articles from others can have a negative impact.
We will identify the major trouble signs to be alert for and then suggest two practical strategies about how to avoid the publishers of fake articles about small business loans and commercial mortgage loans. We will also publish a future article which will go into more depth about suggestions for avoiding fake article sites. There are several primary perpetrators that maliciously use business finance content for which they do not have ownership or copyright. As you might suspect, all of them are seeking financial gains to which they are not legally or ethically entitled.
Quite a few of the sites which have misappropriated the commercial loans articles are seeking more content so that they will be found more often by search engines. They ultimately hope to gain additional revenues primarily by an increased number of visitors which in turn serve as potential clickers of paid advertising links.
These sites frequently use specialized software which scours the internet for relevant content based on particular keyword phrases such as small business commercial loans and working capital business cash advances. Some of the software then randomly combines sentences from multiple sites and produces an article which frequently seems like gibberish (unintelligible language).
This presumably does not bother the owners of sites which use the questionable practice since their primary goal is to get visitors to click on links which produce revenues for them. However, for the discerning reader who notices the nonsensical articles, this approach offers a telling clue to use as a basis for avoiding such sites.
Our first recommended strategy for avoiding fake commercial loan article content requires the reader to at least briefly review the overall content on the website. As noted above, we will provide a more detailed discussion of this and other appropriate strategies in a future business financing report.
There are also many sites hosted by commercial loan brokers which literally have stolen content and published it as their own. As we have discussed in previous articles, business financing is extremely complex. An increasing number of inexperienced commercial mortgage and business cash advance brokers have chosen to make themselves look more experienced than they actually are by using (typically without permission) articles written by others.
What makes this example different from the one described above is the likelihood that the suspect website will steal entire articles from reputable sources and then delete proper references to the originating author. Given that the original article was typically published by a commercial loans expert, the resulting stolen article will look and feel like a legitimate depiction about topics like commercial real estate financing and working capital loans.
In our experience most commercial financing brokers who are guilty of this highly unethical and illegal practice are likely to attempt to stay under the radar by only stealing one or two articles and using them as their own. The absence of multiple articles is a potential telling clue that the content might have been taken from another author or that the publisher is simply not very experienced in successfully completing complicated working capital strategies such as business cash advances.
Our second strategy to avoid fake business loan article content will require the reader to perform a brief search engine review for related articles by the owner of the website. In this case, there are several suggested approaches about what to do next and we will discuss these and other recommendations in a future commercial loan report.
Get Business Loans Now
The growing presence of fake articles about commercial loans and working capital financing should be a serious concern for commercial borrowers. We are referring to several inappropriate and unethical uses of internet content in which the website owner does not have permission to use the published information. At a minimum, a fictitious article about finance topics such as commercial mortgages and business cash advances is likely to result in confusion. In more extreme examples, incorrect business financing decisions might be based on inaccurate articles.
Unfortunately the trends described in this article can also be seen throughout the internet community for a wide variety of subjects such as credit card processing, real estate investments and business opportunity financing. Our focus will be on commercial financing because we have seen firsthand for many years how the growing practice of stealing articles from others can have a negative impact.
We will identify the major trouble signs to be alert for and then suggest two practical strategies about how to avoid the publishers of fake articles about small business loans and commercial mortgage loans. We will also publish a future article which will go into more depth about suggestions for avoiding fake article sites. There are several primary perpetrators that maliciously use business finance content for which they do not have ownership or copyright. As you might suspect, all of them are seeking financial gains to which they are not legally or ethically entitled.
Quite a few of the sites which have misappropriated the commercial loans articles are seeking more content so that they will be found more often by search engines. They ultimately hope to gain additional revenues primarily by an increased number of visitors which in turn serve as potential clickers of paid advertising links.
These sites frequently use specialized software which scours the internet for relevant content based on particular keyword phrases such as small business commercial loans and working capital business cash advances. Some of the software then randomly combines sentences from multiple sites and produces an article which frequently seems like gibberish (unintelligible language).
This presumably does not bother the owners of sites which use the questionable practice since their primary goal is to get visitors to click on links which produce revenues for them. However, for the discerning reader who notices the nonsensical articles, this approach offers a telling clue to use as a basis for avoiding such sites.
Our first recommended strategy for avoiding fake commercial loan article content requires the reader to at least briefly review the overall content on the website. As noted above, we will provide a more detailed discussion of this and other appropriate strategies in a future business financing report.
There are also many sites hosted by commercial loan brokers which literally have stolen content and published it as their own. As we have discussed in previous articles, business financing is extremely complex. An increasing number of inexperienced commercial mortgage and business cash advance brokers have chosen to make themselves look more experienced than they actually are by using (typically without permission) articles written by others.
What makes this example different from the one described above is the likelihood that the suspect website will steal entire articles from reputable sources and then delete proper references to the originating author. Given that the original article was typically published by a commercial loans expert, the resulting stolen article will look and feel like a legitimate depiction about topics like commercial real estate financing and working capital loans.
In our experience most commercial financing brokers who are guilty of this highly unethical and illegal practice are likely to attempt to stay under the radar by only stealing one or two articles and using them as their own. The absence of multiple articles is a potential telling clue that the content might have been taken from another author or that the publisher is simply not very experienced in successfully completing complicated working capital strategies such as business cash advances.
Our second strategy to avoid fake business loan article content will require the reader to perform a brief search engine review for related articles by the owner of the website. In this case, there are several suggested approaches about what to do next and we will discuss these and other recommendations in a future commercial loan report.
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