Asset based commercial lending Texas is growing in popularity. It is a newer alternative to the standard commercial real estate financing that has been in place for many decades.
The conventional commercial lending Texas process normally involves many steps. There is an analysis of the commercial property that must be completed to determine if it has the value to secure the loan. The borrowers must also provide a deposit to cover the loan processing and fees for discovery prior to being granting the loan. In addition, the borrower must submit a great deal of financial information to the lender to demonstrate their financial security and ability to repay the loan that they are requesting. And even though this does not look like a long list of tasks, the reality is that it can take six to twelve weeks for all of this to be completed. But asset based commercial lending Texas can offer a much shorter timeline.
Asset based commercial lending Texas can offer a shorter turnaround time because the lender is not looking as much at the value of the commercial property. In this case, the collateral is not the property being purchased but instead it is the company’s other assets such as accounts receivables, balance sheet assets such as inventory or equipment that is being used as the collateral. This eliminates a lot of the preparation time that a borrower devoted to preparing financial documents for a lender and also reduces the time that the lender must devote to evaluating the borrowers financial stability.
True Asset Based Lenders
In reality, a true asset based lender does not request any financial documentation from a borrower. And they are willing to accept any level of credit score or credit history that the borrower might have. What the lender does want to see is proof of ownership of the other assets that the borrower is using as collateral. In the case of inventory or equipment, the lender will want to be sure of the value of the items. This might require appraisals that the borrower will need to pay for. But the greatest benefit other than the lack of credit and financial information is the fast approval time. In many cases these loans can be processed in a fraction of the time that a conventional loan requires.
Who Are Asset Based Lenders
In many cases, an asset based lender is a private lender who is not restricted by federal lending regulations. This can work in the borrowers favor as the criteria to qualify can be much less strict. But it can also work against the borrower because the lender is not forced to comply with any interest guide lines. But if you need a commercial loan quickly or you have a questionable credit history, then asset based lenders are a great option. However, as with any loan from any lender, you will want to have the loan documents reviewed by your legal professional prior to signing them. This will ensure that you are in full agreement with all of the terms of the loan.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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