Get Adobe Flash player
Archives

Archive for September 2011

Share

Online education videos to help California Real Estate agents use the tools they need to create contracts and process sales.
California Real Estate Education

Share
Share



Is anyone getting commercial or residential real estate loans? The real estate collapse continues. Inside scoop from my realtor friend Carl. Commercial real estate dead? Is this the recovery our president is talking about?

Share
Share
Share
Share

I’m looking into becoming a commercial real estate agent, do I have to take a different exam than if I wanted to work as a residential agent or is it the same test for everyone?
Do you guys have any tips on what kinds of things I should learn to go into commercial real estate?

Share

Overcoming Business Loan and Commercial Mortgage Finance Problems


Free Online Articles Directory




Why Submit Articles?
Top Authors
Top Articles
FAQ
ABAnswers

Publish Article

0 && $.browser.msie ) {
var ie_version = parseInt($.browser.version);
if(ie_version Login


Login via


Register
Hello
My Home
Sign Out

Email

Password


Remember me?
Lost Password?

Home Page > Writing > Non-Fiction > Overcoming Business Loan and Commercial Mortgage Finance Problems

Overcoming Business Loan and Commercial Mortgage Finance Problems

Posted: Oct 30, 2007 |Comments: 0
|




]]>

One of the most difficult business loan scenarios occurs when a commercial borrower is rejected for either a commercial mortgage or commercial loan. There are five specific reasons that account for a healthy majority of business finance rejections. These common business financing application problems are particularly applicable to commercial real estate investment property financing.


Commercial borrowers are likely to be confused when their commercial loan application is turned down and will probably be unsure as to why it happened and what to do next. For each of the five major reasons that a bank might decline a commercial mortgage, a practical strategy is provided for converting the declined commercial real estate loan into an approved business loan.


Two reasons (tax returns and business plan requirements) could impact virtually all businesses. Many business loan officers will begin their business loan and commercial mortgage review process by stating “We will need to see at least three years of tax returns” and “Can you show me your business plan?” before proceeding.


Commercial projects are frequently too unique for traditional commercial banks. In these situations (even if a commercial borrower has favorable tax returns and an adequate business plan), it is not unusual for the business owner to be declined for a commercial mortgage loan by a traditional commercial lender.


The reasons described do not involve unusual issues. It is likely that two or more of the reasons will be applicable for many commercial loan situations.


Commercial Mortgage Rejections: (1) Special Purpose Commercial Real Estate –


Reason Number One for commercial mortgage rejections: The bank does not generally make business loans for the type of business involved or imposes special requirements that make the commercial loan impractical for the commercial borrower. For example, fewer banks are making commercial mortgage loans for restaurants.


In a similar fashion, an auto service business is often given expensive and unnecessary environmental stipulations. There are many special purpose commercial properties such as golf courses, campgrounds, churches, funeral homes and gas stations that most traditional lenders have eliminated from their commercial lending program.

]]>




Strategy Number One for converting the disapproved business loan into an approved commercial mortgage loan: For most business owners, there are reasonable commercial loan options beyond traditional commercial lenders.


There are action-oriented non-traditional commercial lenders that will offer commercial mortgage loans for most special purpose commercial property situations. The best business loan could be available only from a non-traditional lender when a traditional lender won’t provide the necessary commercial real estate loan.


Business Loan Disapprovals: (2) Tax Returns Required –


Reason Number Two for business loan rejections: A loan underwriter finds an issue on tax returns that disqualifies a business borrower under the bank’s lending standards. This “issue” will often be inadequate net income, but when commercial loan underwriters analyze income tax returns, there can be a wide variety of other possibilities which produce the same disapproval.


Strategy Number Two for converting the rejected commercial real estate loan into an approved business loan: Commercial borrowers will never have this reason to worry about if they have applied for a “Stated Income” commercial mortgage loan. Very few traditional lenders use a Stated Income process (no income verification, no tax returns, no IRS Form 4506) for a commercial loan.


Borrowers should search for commercial lenders using Stated Income commercial mortgage loans. Unfortunately, this suggested solution will not work for all commercial loans because of a normal maximum loan amount of about $2-3 million for a Stated Income business loan.


Commercial Loan Rejections: (3) Cash Out Limitations –


Reason Number Three for commercial mortgage loan and business loan disapprovals: When a business attempts to refinance their commercial property loan and wants to get significant cash out, it is normal for a traditional bank to restrict what the funds are used for and to severely limit the amount of cash received. Even though the bank is willing to make the commercial loan, if they won’t provide the cash required by the commercial borrower, this is similar to rejecting the loan.


Strategy Number Three for converting the declined commercial mortgage into an approved commercial real estate loan: As mentioned above, there are other commercial lending options available. The commercial borrower’s mission (and it is not impossible at all) is to use a commercial real estate lender that will allow them to get much larger amounts of cash out of a commercial refinancing without restrictions on what they do with it.


Commercial Real Estate Investment Property Loan Disapprovals: (4) Cross Collateral Requirements –


Reason Number Four for commercial mortgage loan and business loan disapprovals: The bank will not make a commercial loan without sufficient collateral such as a lien on personal assets.


Strategy Number Four for converting the disapproved business loan into an approved commercial mortgage loan: Business borrowers should seek out commercial lenders that will not “cross collateralize” assets as a stipulation for getting business financing. This will result in more flexibility for the commercial borrower and preclude unwise (and unnecessary) connections between business and personal assets.


Commercial Real Estate Loan Rejections: (5) Business Plan Requirements –


Reason Number Five for commercial mortgage loan and business loan disapprovals: A bank’s loan officer determines that the business plan does not support the needed commercial loan.


Strategy Number Five for converting the disapproved business loan into an approved commercial mortgage loan: Commercial borrowers should save money and avoid possible delays by working with a lender that does not require a business plan due to these primary advantages:


(A) Reduce commercial loan costs by thousands of dollars. A common range for an average business plan (prepared to typical bank specifications) is $5,000 to $10,000.


(B) Shorten the business financing closing period. Business plan preparation is likely to take 1-2 months or more.


(C) If the lender does not require a business plan, there is one less item standing between the commercial borrower and their approved commercial loan.

Start increasing your traffic today just by submitting articles with us, click here to get started.
Liked this article? Click here to publish it on your website or blog, it’s free and easy!

Steve Bush
About the Author:

Steve Bush and AEX Commercial Financing Group provide business opportunity loan – business finance help, commercial mortgage – business loan advice and publish AEX Commercial Real Estate Investment Property Financing Reports.

]]>
Questions and Answers

Ask our experts your Non-Fiction related questions here…

Ask

200 Characters left

What is the best way to break into the commercial mortgage broker business?
What are the current commercial mortgage rates?
Can i get a business loan if my personal credit is not so good?

Rate this Article

1
2
3
4
5

vote(s)
0 vote(s)

Feedback

Print

Re-Publish

0) {
ch_selected = Math.floor(Math.random()*ch_queries.length);
if(ch_selected == ch_queries.length) ch_selected–;
ch_query = ch_queries[ch_selected];
}
}catch(e){
ch_query = document.title;
}
]]>

Source:  http://www.articlesbase.com/non-fiction-articles/overcoming-business-loan-and-commercial-mortgage-finance-problems-247993.html

Article Tags:
business loan, commercial mortgage, commercial loan, real estate, mortgage, business, finance, loan

Related Videos

Related Articles

Latest Non-Fiction Articles
More from Steve Bush


Which Loan is Right for Your Business

Small Business Loan Options and Tips. Finding the right loan for your small business can be hard work. Christopher Hurn, an expert in commercial capital gives some helpful tips on how you can get the best loan for your business.
(05:30)


How to Own Finance Commercial Real Estate

All healthy small and mid-sized businesses should eventually own their own real estate.It doesn’t take 20% down and large monthly payments to own commerical property in small business.
(06:56)


Small Business Solutions – Commercial Postcards

Mail Your Way To Success. Andrew Field explains why a postcard arriving in your customer’s mailboxes is still an effective marketing tool. Learn how to increase the effectiveness of your postcard campaign.

(02:41)


How to Expand Your Market

Learn how to go global and expand your business market with the aid of the U.S commercial Service. (07:24)


How to Protect Assets

When starting a business, give it lots of “TLC” and a healthy dash of “CYA” — Cover Your Assets. (02:04)

Business Finance Essentials for a Real Estate Mortgage Loan

Many residential real estate investors are exploring commercial real estate and business loan alternatives as a result of the increasingly chaotic investment environment for residential financing. There are more key differences between residential real estate investment and commercial real estate investment than realized by most borrowers.

By:
Stephen Bushl
Financel
Dec 12, 2007

Understanding Commercial Real Estate Buying and Finance Compared to Residential Buying and Finance

Understanding commercial real estate buying and finance compared to residential buying and finance is like understanding the difference between oranges and apples. Commercial real estate concerns itself with only business.

By:
Denise Parkerl

Finance>
Real Estatel
May 18, 2011

Interest Only Mortgages: A Risky Real Estate Move?

Well, let’s examine this information, one piece at a time. The first piece to examine is the basis for the desired interest only mortgage product.

By:
Uchenna Ani-Okoyel

Finance>
Mortgagel
Jun 06, 2008

Bridging Loans – Fulfilling Monetary Shortfall between Real Estate Transactions

You are attempting to buy a brand new property and selling this one to boost cash for the new purchase. It’s usually tough corresponding sale of one property with the buying of another. This almost always ends up in financial gap. For this specific circumstance bridging loans are organized.

By:
Dorothy Frankl

Finance>
Loansl
Feb 13, 2011

Real Estate Finance

Finance can be defined as the branch of economics dealing with the management of money and other assets. The management of credit and banking and the commercial activities of providing funds and capital for investment also fall under the umbrella of finance.

By:
ericl

Finance>
Real Estatel
Aug 16, 2011

Commercial Real Estate Investment Property and Business Financing

Borrowers have more commercial loan and commercial mortgage options than they think. These business finance choices can be called “Thinking Outside the Bank” because most borrowers believe that a bank is the best source for a commercial real estate investment property loan or business financing.

By:
Steve Bushl

Finance>
Loansl
Nov 01, 2007
lViews: 121

The BookWorm: Sport

Resident Bookworm James Dunn has put down the books for a few moments and taken a glance at the TV…. needless to say, he doesn’t like what he sees

By:
Mattl

Writing>
Non-Fictionl
Sep 14, 2011

The watchers: fall of mankind

the story begins with the origins of mankind and the destruction of “the ladder to heaven” for mankind has fallen from grace…So god created a group called the “watchers” who will make sure humans obey god……but even this failed against humanity. The next part will take place in the year 2211 where humanity has fallen away from god……and they become decieved by the deoms of the earth making way for the last battle in human history.on the plains of “Megiddo”

By:
Randolph Boyerl

Writing>
Non-Fictionl
Sep 13, 2011

The friends are like the GPS

With a good friend, I will have more wonderful ideas and fewer mistakes. They are just like the GPS in the vehicle.

By:
Henry Liml

Writing>
Non-Fictionl
Sep 13, 2011

The best companion when getting alone

In the spare time, I may stay at home, go out for a walk, and drive a car outside, but being alone is still rather boring for me. Thanks to the music, my best companion, it gives me comfort and happiness anytime and anywhere. With beautiful music, I never feel lonely even when I get alone.

By:
Henry Liml

Writing>
Non-Fictionl
Sep 13, 2011

Web Content Writing Tips

Web content writing improves the ranking of your website on search engines. In addition to this, it provides useful answers to readers, giving them a reason to stay on your website.

By:
Jack Loganl

Writing>
Non-Fictionl
Sep 05, 2011

Commercial Real Estate Investment Property and Business Financing

Borrowers have more commercial loan and commercial mortgage options than they think. These business finance choices can be called “Thinking Outside the Bank” because most borrowers believe that a bank is the best source for a commercial real estate investment property loan or business financing.

By:
Steve Bushl

Finance>
Loansl
Nov 01, 2007
lViews: 121

Add new Comment

Your Name: *

Your Email:

Comment Body: *

 

Verification code:*

* Required fields

Submit

Your Articles Here
It’s Free and easy

Sign Up Today


Author Navigation

My Home
Publish Article
View/Edit Articles
View/Edit Q&A
Edit your Account
Manage Authors
Statistics Page
Personal RSS Builder
My Home
Edit your Account
Update Profile
View/Edit Q&A
Publish Article
Author Box


Steve Bush has 2 articles online

Contact Author

Subscribe to RSS

Print article

Send to friend

Re-Publish article

Articles Categories
All Categories

Advertising
Arts & Entertainment
Automotive
Beauty
Business
Careers
Computers
Education
Finance
Food and Beverage
Health
Hobbies
Home and Family
Home Improvement
Internet
Law
Marketing
News and Society
Relationships
Self Improvement
Shopping
Spirituality
Sports and Fitness
Technology
Travel
Writing

Writing

Article Marketing
Book Reviews
Copywriting
EBooks
Ezines and Newsletters
Fiction
Non-Fiction
Poetry
Publishing
Quotes
Satire
Screenplay
Self Publishing

]]>

Need Help?
Contact Us
FAQ
Submit Articles
Editorial Guidelines
Blog

Site Links
Recent Articles
Top Authors
Top Articles
Find Articles
Site Map
Mobile Version

Webmasters
RSS Builder
RSS
Link to Us

Business Info
Advertising

Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2011 Free Articles by ArticlesBase.com, All rights reserved.

Share
Share