Commercial Lenders and their Criteria

By now, you have probably done more than your share of research on commercial lenders and what they have to offer; but, chances are you still are hundred percent clear on their criteria or how one lender’s criteria is truly different than the next. Well, the good news is that you have come to the right place for some insight on commercial lenders and their criteria.

If this is your first time deviling into the world of commercial lenders, you may not know where to begin, which is perfectly okay. You need to start somewhere just like every other commercial investor or borrow before you. Consequently, the best place to start, after narrowing down your particular niche, is with your top lenders’ criteria.

At first glance, you will quickly be able to see that most lenders have basic or standard lending criteria. In other words, much like other lenders, these particular lenders are looking for two specific things. The first thing is the ability or rather the likelihood a borrower will be able to repay the loan. Secondly, most lenders want to ensure that they will be able to recover the entire amount of the loan. This means lenders look to see if you can repay everything including interests, associated costs and even fees due to a default on the loan.

Outside of these two things, a lender of commercial financing may seek to add a few more things to their criteria. This is where you start to see a difference between lenders. Moreover, it is usually these additional criteria that will sway you in one lender’s direction versus another’s. With that being said, you should always strive to meet your lender’s basic or standard criteria first and foremost. This will allow you to worry about the finer details and effectively evaluate your various lenders.

Additional Criteria Expectations from Commercial Lender

Now that you know, you can only truly be prepared for two basic requirements without doing further research; it may help to know that any other additional criteria are heavily regulated. This means that there are legal requirements and compliance standards in place to ensure that you, the borrower or investor, are not at the mercy of your future lender. For instance, all lenders, whether commercial or not, tend to require your standard property documents, detailed financial documentation, and clear planning for closing fees or additional costs. Nevertheless, it is important to note that no two lenders criteria will be the same and there is no set standard for documenting commercial financing. Thus, you really need to do your research as well as compare and contrasts additional criteria.

Other Things to Consider

Therefore, at the end of the day, all these above expectations matter. However, you still need to make it a point to take some of the focus off your top lender choices and their criteria, so that you can put some of that focus on your business plan and/or end-goals. In doing so, you will, once and for all be able to justify meeting one particular set of criteria versus another set.

 

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.

 

          

 

Technorati Tags: commercial real estate loan,commercial real estate lenders,commercial real estate lending

Eager To Get Your Commercial Real Estate Loan Approved? Be Prepared To Jump Through A Few Hoops

When you apply for a commercial real estate loan there will be certain things you will be expected to do or have in order to get approved.

When you apply for a job, there are steps you have to go through in order to get hired. Depending on what you are applying for, you will likely start with an application or resume, interview with someone, and provide proof that you can legally work in the United States.

Commercial real estate loans are no different. Just like a job, there is a process involved with getting approved for one and if you omit, leave out, or fail to meet certain standards you stand the risk of getting turned down.

So before applying for a loan, it helps to review many of the factors involved in approval.

Property Appraisals

Before a lender is going to approve your loan, they will likely require or ask that a property appraisal is conducted. They are going to want to know the current value of the property you plan on buying or using as collateral. It also helps the lender make sure they do not lend you too much.

Value is determined by examining the size of the property, its location, accessibility, and the condition of any buildings on it.

Down Payments for Commercial Real Estate Loans

You are applying for a commercial real estate loan because you don’t have enough to start your business on your own. However, lenders do not want to be the only one investing in your business. They will want to see that you will be putting down a down payment on the property before approving your loan. Depending on the lender, the down payment could be as much as 20 percent of the loan amount or as high as 30 or 40 percent. When you are talking about a loan in the hundreds of thousands or millions that can be a substantial amount of cash.

Credit Record for Commercial Real Estate Loans

When we are young, we don’t tend to think about our credit rating a whole lot. It doesn’t affect us in the short term so we can rationalize doing something that could damage it by telling ourselves ‘I’ll deal with it later.’ Except when later arrives and you’ve done nothing to fix the damage you suddenly find you can’t get approved for a loan.

It can’t hurt to check your score and rating before you apply. No matter what your score is, if there are things you can fix, it would be smart to go ahead and do so. It can only help your commercial real estate loan application get approved.

Debt Service Coverage Ratio for Commercial Real Estate Loan

A debt service coverage ratio is the ratio of the revenue your business is going to generate on a monthly basis to the monthly payment you will be expected to make on your loan. This ratio will help the lender figure out what payments you will be able to make.

 

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.









          

Technorati Tags: commercial real estate loan,commercial lending,commercial loans

How to use Commercial Lending to your Advantage

Commercial lending has the potential to be extremely beneficial when it comes to your business and its future. Of course, if you do not play your card right or are unable to meet the terms of your commercial loan, there can be clear disadvantages; but that is why it is important to know how to use commercial lending to your benefit.)

The main advantage that comes with commercial lending is the potential for growth of your business. At first, this may seem like a no-brainer, but in order to achieve this particular effect, you need to make sure that you are truly in a position for potential growth. This means you and your current business need to overcome a few hurdles along the way.

For instance, your business credit needs to be more than average. In other words, you should be able to offer extensive proof that your business has outstanding, if not above average credit. Clearly, if you are a well-established business, it will be much easier to show proof of above average or excellent credit. However, if you are a newer business or rather a first-time owner, a lack of credit will most likely bring the lending process to a halt. Of course, this may put a pin in your plans for now, but the good news is that this setback is only temporary.

In addition to need above average business credit, you will also need your personal credit history to be up to par. This means your annual income, credit score, and previous loan history matter. Remember, just as you will need to provide detailed reports of your business financial situation, you will also have to do the same for yourself personally. Thus, you need to have stellar personal credit and the documentation to back it up. This, especially, holds true if you are looking for a larger sum of commercial financing. Ultimately, having both your personal and business credit squared away means that you can move forward with the application process, which of course is the first step to financing and potential business growth.

 

Commercial Lending how to Avoid the Pitfalls

Now that you understand, how much your credit matters with commercial financing, let us go over what you can do if your business and/or personal credit is a problem. In essence, you can still secure a commercial loan with collateral such as your home or vehicle. However, it almost goes without saying that there is an increased risk when you choose to use collateral (secured loans). Therefore, if business growth is highly unlikely in the future, you may want to wait until it is more feasible credit wise.

The Benefits for your Business

With that being said, commercial loans generally come with incentives such as extremely low-interest rates, longer repayment terms that are more flexible, retained ownership of your business and no need for collateral( unsecured loans)when you have decent credit—just to name a few. Thus, as you can see, with these incentives only, the ability to grow (and keep) your business is very likely as this form of lending/financing wants to see your business succeed.

 

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.

 

          

 

Technorati Tags: commercial real estate loan,commercial real estate lenders,commercial real estate lending,commercial lenders,commercial lendng

Commercial Lending Requirements

Commercial lending has the potential to be extremely beneficial when it comes to your business and its future. Of course, if you do not play your card right or are unable to meet the terms of your commercial loan, there can be clear disadvantages; but that is why it is important to know how to use commercial lending to your benefit.)

The main advantage that comes with commercial lending is the potential for growth of your business. At first, this may seem like a no-brainer, but in order to achieve this particular effect, you need to make sure that you are truly in a position for potential growth. This means you and your current business need to overcome a few hurdles along the way.

For instance, your business credit needs to be more than average. In other words, you should be able to offer extensive proof that your business has outstanding, if not above average credit. Clearly, if you are a well-established business, it will be much easier to show proof of above average or excellent credit. However, if you are a newer business or rather a first-time owner, a lack of credit will most likely bring the lending process to a halt. Of course, this may put a pin in your plans for now, but the good news is that this setback is only temporary.

In addition to need above average business credit, you will also need your personal credit history to be up to par. This means your annual income, credit score, and previous loan history matter. Remember, just as you will need to provide detailed reports of your business financial situation, you will also have to do the same for yourself personally. Thus, you need to have stellar personal credit and the documentation to back it up. This, especially, holds true if you are looking for a larger sum of commercial financing. Ultimately, having both your personal and business credit squared away means that you can move forward with the application process, which of course is the first step to financing and potential business growth.

Commercial Lending how to Avoid the Pitfalls

Now that you understand, how much your credit matters with commercial financing, let us go over what you can do if your business and/or personal credit is a problem. In essence, you can still secure a commercial loan with collateral such as your home or vehicle. However, it almost goes without saying that there is an increased risk when you choose to use collateral (secured loans). Therefore, if business growth is highly unlikely in the future, you may want to wait until it is more feasible credit wise.

The Benefits for your Business

With that being said, commercial loans generally come with incentives such as extremely low-interest rates, longer repayment terms that are more flexible, retained ownership of your business and no need for collateral( unsecured loans)when you have decent credit—just to name a few. Thus, as you can see, with these incentives only, the ability to grow (and keep) your business is very likely as this form of lending/financing wants to see your business succeed.

 

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.

 

          

 

Technorati Tags: commercial real estate loan,commercial real estate lenders,commercial real estate lending,commercial lenders,commercial lendng

Online Marketplace Lenders Helping Borrowers With Commercial Real Estate Loan Needs

Everything is online these days—including the ability to get your commercial real estate loan needs met.

At one time, if a person interested in opening a business was in need of a commercial real estate loan, he or she had to go to the bank and hope for the best. Over the years, other avenues have become available with many willing to take on riskier borrowers but charging a higher interest rate to make up for the increased risk.

But now, thanks to the miracle of modern technology, borrowers do not need to leave the comfort of their homes to get a loan. They just need to visit an online marketplace lender.

What Is An Online Marketplace Lender?

While we all wish we had excellent credit, we do not. People make mistakes, situations occur that require money, and sometimes you have to do things that seriously damage your credit rating. At the time you may think you can live with it, but when the bank and credit union turn down your application for a commercial real estate loan.

Luckily there is an option that is still available to you—online marketplace lenders. What they do is allow someone to receive funding through an online platform. The site sources, underwrites, services the loan, and markets it to investors to fund it. Many like to specialize in short term loans, but some will also work with longer terms.

Since the risk is greater, interest rates often tend to be higher to compensate lenders for taking a chance.

How Does An Online Marketplace Lender Benefit Borrowers? Investors?

Every form of lending comes with its positives and negatives, and getting your commercial real estate loan needs met through an online lender is no different.

For the borrower, the benefit is clear. They needed to get their financing needs met by someone, and they did. Using a traditional lender was not an option for them, but thanks to an online lender they were able to reach an alternate and untapped source of financing. In many cases, the process is faster and more efficient. So you will at least not have to wait for weeks and months to find out you are getting declined.

As an investor, it allows for someone that does not have the kind of funds on hand to finance a project completely the chance to get involved in commercial real estate. Depending on the platform used, they even have the option of going to the site and examining potential projects on their own. They can then decide which project and how much they want to put in.

The income returns are often competitive with other investment options.

Commercial real estate loan are being serviced through online marketplace lenders, but the practice has yet to take off. However, the demand is there, and as more investors realize it, more options will likely become available online to those searching for a lender willing to approve them.

 

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.









          

Technorati Tags: commercial real estate loan,commercial lending,commercial loans

Cyber Threats Are A Real Danger For Commercial Lenders

In the last few years there have been several large-scale data thefts reported in the news. Larger banks have been targeted, and it’s only a matter of time before commercial lender, in general, are commonly victimized—if they aren’t careful.

The internet is a fantastic and wondrous creation that has allowed so many information to become available to us simply by running a search for it. It allows us to stay in touch with long lost friends on the other side of the world. We can watch movies, play games, research a paper for school—the possibilities are endless.

It has also opened up a whole new path for people to be victimized when a cyber-criminal steals their identity. Stories of major corporations experiencing data breaches have become more common in recent years, and have seen millions of people be affected.

It is only a matter of time before smaller operations and commercial lenders are targeted. The type of data they collect would be right up a cybercriminal's alley.

 

Cyber-security And Commercial Lenders

Cyber-criminals are all about stealing data whether it’s for identity theft or anything else. Larger corporations may be more appealing to criminals now due to the potential volume of data that could be stolen, but even small-balance commercial lenders should be worried.

Loan applications have all sorts of personal information on them; likely all an identity theft would need. They may not be getting targeted a lot right now. But as top corporations improve their security, the smaller volume of data at the lesser protected commercial lenders becomes more appealing.

Anyone that isn’t taking the threat seriously is just being foolish.

 

What Can Commercial Lenders Do To Better Protect Themselves?

When it comes to cyber security, it is imperative for commercial lender regardless of size to be proactive about it. Don’t just wait till one of your clients or affiliates is attacked to improve your security—do it now. You would much rather stop an attack before it comes rather than react to one after it comes.

What can/should you do? Educate yourself and your staff as much as you can. Make sure they know what the latest threats are and how to recognize them. Be sure and have a well-thought-out policy on appropriate internet use at work to minimize exposure to questionable sites.

If you really want to make sure you are as protected as you can be, if there are customers, partners, or affiliates that have access to your network, make sure you are aware of what kind of security they have. If their security is lax, you may want to consider limiting their access until they carry out the necessary improvements to their cyber security.

If they don’t want to improve their cyber security to a level you are comfortable with, you may want to consider how important it is to you. The chance your security will be breached is not high, but if it is it could mean the end of your business and cost you a lot of money.

http://www.level4funding.com/commercial-bridge-loan-commercial-lending-commercial-hard-money-lenders/

 

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.









          

 

Technorati Tags: Commercial lenders,commercial lenders,commercial loans,commercial lending