Learn To Be A Fix & Flip Investor

Sunday, October 15, 2017

How Using Collateral Can Help You Secure Commercial Real Estate Financing

As you start or grow your business, you may come upon a circumstance when you need to secure a loan to boost your business or cover some important expenses. When seeking commercial real estate financing, using collateral can help you get the right loan terms.

In the world of commercial loans, collateral refers to assets that serve as a guarantee to a lender in the instance that you cannot pay back your loan. In this case, the lender has the rights to obtain ownership of said collateral, whether it is a building, your company’s equipment or machinery or even your own car or house. While this sounds scary, collateral can put your loan amount into perspective, so you only loan against your assets. In this case, your commercial real estate financing will be calculated on a loan to value ratio, and the greater the value or your collateral, the higher loan amount you can borrow, in theory.

These assets are defined a certain way, so you can’t use certain things as collateral against your loan. There are also items of value you have that you may not even have considered as collateral. Typically collateral can be split into two categories – real and paper. “Real” assets refer to cars and homes, as mentioned above, but also watercraft and other vehicles. While buildings can serve as collateral, banks and lenders typically won’t consider plots of land.

The other category is “Paper” collateral, which includes stocks, bonds, investment funding and payment rights. When it comes to company stocks, take into account the current state of the market because if your stock drops, your lender has the right to sell off the assets that you used as collateral. You can also use your business’s revenue as collateral, however you will have to have a solid projection of your company’s business earnings over a set timeframe. Payment plans could be required from the lender for your commercial real estate financing loan in increments of monthly, quarterly, or even annually.

When you are applying for a loan – put your cards on the table… even your collateral.

When it comes to securing a loan, it all comes down to one basic thing — lenders need to know that you will be able to pay back the loan or that they will get something of value (aka your collateral) if you are not able to repay the loan. Ultimately, they can’t risk losing the money they lend you.

Your collateral can be just the thing lenders need to approve your loan!

Securing commercial real estate financing with collateral is a great way to get the loan you need for your growing business. As long as you intend to repay the loan within the specified terms agreed upon between you and the lender, there is no reason to fear putting up collateral when you need a loan. So when you are shopping for a loan, make sure to let your lender know what kind of collateral you have to back up your loan.

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 loans,commercial lending,commercial mortgage

How to Find the Right Commercial Lender for Your Business Loan Needs

When you determine that you are ready to obtain a loan for your company, it’s important that you do your research in all areas. One of the most important things to do it find a commercial lender that you feel confident will get the best loan terms for you.

The world of commercial loans can be complex and confusing. That’s why it’s all the more crucial to find a lender that will make your loan the priority. Your commercial lender has the power to negotiate better rates, terms, and repayment structures, and can point you in the right direction throughout the process of applying for a loan.

When you are seeking a loan for your company, there is no shortage of options. There are various types of loans that are specific to certain business needs, such as equipment financing, and there are even short term and long term loans that are defined by their loan amount and payback timeframe. If you are seeking your first loan, the waters can quickly get murky and you can easily become frustrated, and even make a hasty decision just because you are so weary from the process. Seeking the counsel of a commercial lender can help you avoid the pitfalls associated with applying for a first time loan.

Traditional banks can serve as a direct commercial lender when it comes to their commercial offerings, but working with conduit lenders is another option. This means a conduit lender can help approve a loan and maintain it for a specified amount of time. After that term, however, they can sell it to a third party agency that is security backed. This is typically done as a short-term investment called securitization. Loan payments are designed in this type of financing to avoid prepayment, which allows for a great deal of security.

Pretend you are interviewing an employee when you meet with a lender

Consider it an interview for the job of being your lender and advisor. When you talk to commercial lenders, make sure you ask plenty of questions about their area of expertise and if they have ever worked with a business similar to yours, with similar loan needs and budgetary restrictions. Getting testimonials is a good idea, too. Before seeking commercial lenders online, ask around – talk to other small business owners to see if they have pursued loans with the assistance of a lender and if they had a favorable experience. If you have a solid relationship with your bank, that is a good place to start as well.

Take heed: not every commercial lender will handle your loan application in the same way.

Sometimes there is no “hard and fast” way to tell if you have found the right lender for you. Some of it is about trust. Some of it may come down to customer service or a “feeling” that this person has your company’s best interest at heart. Regardless of how you proceed with your loan, make sure you are happy with all the terms before signing any documentation. It’s also a good idea to have an experience financial attorney look over the agreement to ensure there are no hidden fees or “fine print” that your lender failed to mention. All in all working with a lender should be a win-win situation.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How Commercial Hard Money Lenders Can Be the Helping Hand You Need to Build or Grown Your Business

Commercial hard money lenders are the experts that know the ins and outs of loans and investments and can help you find the loan to fit your needs. If you are ready to get a loan, these professionals can be your key to approval eligibility.

Whether your business is in need of a long-term loan to purchase a building, an equipment loan for machinery or other equipment, or a short-term loan for cash fast, commercial hard money lenders can help you find approval success. But first it’s important to know what you are getting into when you set out to work with these types of financiers.

These lenders often handle just a sole property type, which means that you will probably be dealing with a specific niche lender when you are seeking hard money funding. If you are looking to obtain short-term commercial loan financing, it’s important that you find a lender that works specifically with businesses of your same caliber or in your general industry. It is crucial that they understand the ins and outs of your market in order to best help you navigate your loan application.

These lenders do not operate in the same way as a traditional bank might when it comes to your loan process. They can be much more flexible in the case of a foreclosure, less than desirable credit or dings on your credit history, so that can be very beneficial for new businesses that have yet to establish credit history or for businesses that have experienced some growing pains or rough patches that left their credit history a bit tarnished.

Commercial hard money lenders can be just the experts to help you navigate a non-traditional loan.

If your company has special circumstances that you think may prohibit you from obtaining a conventional bank loan, these lenders are the way to go. They can help you in your particular niche. They have all the expertise about specific types of loans that would best benefit your company, and they can help you understand the terms of the loan you need. They have the ability to negotiate better terms as well.

Finding the right commercial hard money lenders is key.

Take some time to research the right financing partner for your business. This is an individual who you need to trust with your personal and business financial history, as well as the future success of your business, so now it not the time to take short cuts in your research or due diligence in finding the right lender for your business needs. Once you find the right lender, you will know and that will put you at ease as you begin the loan application process together.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What is Credit Risk and How it Can Affect Your Commercial Real Estate Financing

When it comes to securing commercial real estate financing for your business, banks and lenders will typically want to see your credit score and report. That’s because they must determine the credit risk — before deciding whether or not to approve your loan application.

Credit risk is the chance that a bank or lender will lose value when outstanding loans go unpaid. While financial institutions and lenders have many factors to weigh when it comes to ultimately determining whether your application will be approved, credit risk is an important one of those factors. Lenders can assess the risk associated with taking on your loans by determining your ability to repay the funds borrowed to you.

This capacity is based on the revenue that your company generates along with other factors such as the amount of collateral you have to put towards the loan. These are important aspects that lenders look at when it comes to deciding if your loan is “worth the risk.” In any instance, the lender takes on a certain amount of risk, however, they look to mitigate that risk whenever possible. They certainly don’t want to loan money to a business that shows no capacity to be able to repay the loan within agreed upon terms.

Another way lenders will assess this risk is by reviewing your past repayment history – via credit history or other loans. This can be either personal or business debt. Beyond just the amount you’ve borrowed and paid back, they look to see if your previous debts were repaid in a timely and appropriate manner. If you have delinquent marks based on late or missed payments, lenders may find themselves quickly tightening their purse strings when it comes to your commercial real estate financing.

Even if you are considered a credit risk, you still have the ability to be eligible for a loan.

You can minimize your credit risk by maximizing your loan to value ratio or increasing the amount of personal equity you can put towards the loan. Sometimes these things are enough to help you persuade a lender to loan you the commercial real estate financing you are in need of.

If you are rejected for a loan, don’t give up — you can still seek alternative lending options

While a traditional bank or other conventional lender may not be able to look past your credit risk, that doesn’t mean you will never obtain the loan you need. Seek other options, such as alternative lenders that are more likely to “take the gamble” on a higher-risk loan scenario that you might be in. Continue to search until you find the right lender — and the right loan — for you.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Prepare for Obtaining Commercial Mortgages

When your company is in need of a loan, whether it’s the first or if you have secured commercial mortgages in the past, there are still many things to consider. There are also a number of ways you can properly prepare to ensure the success of your loan application process.

Even if you have a solid business plan, a great credit score and squeaky clean credit history and collateral to boot, getting commercial mortgages loans can still be a lengthy and complex process. If you take some things into consideration before applying, you can avoid some of the pitfalls that companies make which ultimately may make the difference between getting approved for a loan… or not.

Before seeking a loan, you should know that during the underwriting process you will be subjected to thorough financial examination. You should have all financial records in order – such as bank statements, recent credit report, tax returns, business balance sheets and more – before applying for a loan. Some banks and lenders may also request that you complete a revenue and expense projection report. Having this information completed prior to application, will make the process go more smoothly.

In addition to business records, as the business owner you may be asked to show personal statements as well in order to receive a commercial mortgages loan. Banks and lenders will want to know as much about your personal financial background as possible before deciding if they want to give you a loan. They will want to review your personal credit score and history, and could also ask to see your personal tax returns or other important financial information.

Another way to prepare is to consider whether or not you have and/or will need to utilize collateral in order to secure your loan. Collateral, or assets from your company or personal use, can be used to secure a loan in the case of not so great credit history or other examples. The lender needs to know that if you are unable to repay the loan, he will not lose out. With collateral, you guarantee repayment and if you cannot repay with cash, the lender has the right to seize your assets as agreed upon in the contract.

The key to successfully obtaining commercial mortgages is preparation.

You’ve heard how important location, location, location is in residential real estate, right? Well, preparation, preparation, preparation is just as important when it comes to commercial lending. The better prepared you are, the better off you will be – and less stressed too!

Getting some assistance with your preparation is never a bad thing!

You may be an expert in your line of business, but if you aren’t keen on preparing a business plan or the like, it’s not a bad idea to bring in an expert to help you prepare to put your best foot forward when it comes to securing a loan. The more prepared, the less hassle you’ll encounter. But remember, lenders and banks aren’t trying to cause you grief – they simply need to protect themselves and ensure you have the ability to pay back the loan they are laying on the line for you.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Avoid Making These Mistakes When Applying for Commercial Real Estate Financing

Sure, we all make mistakes, but some are bigger than others and can make a lasting impression on the future and success of your business. When it comes to securing commercial real estate financing, try to avoid making these mistakes.

There is a lot to learn about applying for a loan for your business, but you can get a head start by understanding a few of the pitfalls to avoid. One of the biggest mistakes is making a hasty decision when deciding upon the loan you need and the lender who can supply said loan. Take plenty of time to research the types of loans that are best for your business, and determine which is best for your business before leaping into the loan application process (online or otherwise).

If you’ve never applied for a loan before, it’s also a good idea to then seek a lender who is experienced in that type of loan as well as the industry of your company, can be a very important key in the success of your commercial real estate financing loan application process. They can advise you through the process, and help you negotiate better terms for your repayment schedule. It’s important that you get a good feeling about the lender you work with, and that you feel you can trust them with your business’s financial needs. Without their advice, you may end up wasting both time and money having to resubmit applications and documentation or even lose out on a desired property.

Another mistake is trying to go through the loan approval process without the professional counsel of an attorney that specializes in commercial real estate financing. A loan of this nature is a huge transaction, and a legally binding one at that, so it’s important that you understand all the fine print, hidden fees and jargon before putting your signature on the dotted line. An experienced attorney can help you navigate unfamiliar terms, conditions and clauses that you might not fully comprehend. To ensure the contract is just and reasonable, get an attorney.

There are also some things you can do to increase your eligibility and chances of getting your loan approved.

Having a solid business plan is crucial — you want to be able to prove the a bank or lender that your business will make money (so you can repay the loan). It’s also important to show a high FICO score and clean credit history. However, don’t worry if you have a new business or are still establishing business credit, you can still be successful at obtaining commercial real estate financing, though you may need to seek alternative lender options.

Don’t rush through the process and you will avoid making mistakes

Understanding that seeking a loan of this type is a major commitment and a decision that should not be taken lightly. A large loan is an investment and it can be risky if your business doesn’t make money right away or hits a rough spot and money gets tight. Take the time to make sure you get the best loan for your business and that you are comfortable with all the terms, especially repayment, to ensure the best success for your growing business.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tips for Determining What Type of Commercial Hard Money Loans are Right for Your Business — Secured or Unsecured

Once you've figured out that you need to secure financing to help your company get off the ground or grow to the next level, there is still more to decide. You it’s important to know which type of commercial hard money loans are best suited for the funding you need for your business.

Determining that you need a loan is merely “step number one.” But as a business owner, you’ll need to be prepared to take many more steps towards selecting the type of loan you need and then going through the loan approval process. With all commercial hard money loans, there are advantages and disadvantages, and certain loans may suit your company’s needs more than others so it’s important to take some time to research the various types of loans or speak with a professional lender who can help advise you on what type of loans would be best for you and your business needs.

Two very common loans are secured and unsecured. They are the same in many ways; however, they also have some important differences. A secure loan, for example, is typically associated with a larger loan sum than an unsecured loan, and this is based on the amount of collateral that a business has to put up to back the loan. In the case of a secure loan, you can use collateral, or your company’s assets to obtain or “secure” your ability to repay the loan. If you are unable to pay the loan back, you could lose your collateral to the lender. Assets can be business equipment, a vehicle or even your home. Secure loans are often more flexible due to this reason. Because there is less risk involved with this type of loan, interest rates are typically lower than with an unsecured loan, and include options such as fixed or variable.

If you do not have any collateral to put up, you may need to seek unsecured commercial hard money loans. Without having collateral to back the loan, the lender assumes a higher risk. Because of this, unsecured loans typically are associated with higher interest rates and have a fixed (and sometimes rigid) repayment schedule. There is usually a timeframe for when the loan must be paid back within. However, one upside is that these loans are typically approved much more quickly than secured loans.

If you are unsure if a secured or unsecured commercial loan is right for your business, you may need to seek the guidance of a professional commercial lender.

Sometimes it’s just a matter of speaking with an expert on a topic to help you determine which loan is best suited for your business. There are also a few questions you can ask yourself to help you determine your needs – do you need a large sum of money? Are you in need of cash fast? Do you have something of value to put on the line as collateral? These are all things to consider and in these answers, you are likely to see which loan is best for you.

Once you’ve decided which type of commercial hard money loans you need for your business, you can move on to “step two.”

Research professional lenders that are experienced in the type of loan you desire, and also the type of business you are building or expanding. Having someone to help guide you through the loan process can make the entire process much more smooth and much less stressful.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

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Sunday, October 15, 2017

How Using Collateral Can Help You Secure Commercial Real Estate Financing

As you start or grow your business, you may come upon a circumstance when you need to secure a loan to boost your business or cover some important expenses. When seeking commercial real estate financing, using collateral can help you get the right loan terms.

When you are applying for a loan – put your cards on the table… even your collateral.

Your collateral can be just the thing lenders need to approve your loan!

How to Find the Right Commercial Lender for Your Business Loan Needs

When you determine that you are ready to obtain a loan for your company, it’s important that you do your research in all areas. One of the most important things to do it find a commercial lender that you feel confident will get the best loan terms for you.

Pretend you are interviewing an employee when you meet with a lender

Take heed: not every commercial lender will handle your loan application in the same way.

How Commercial Hard Money Lenders Can Be the Helping Hand You Need to Build or Grown Your Business

Commercial hard money lenders are the experts that know the ins and outs of loans and investments and can help you find the loan to fit your needs. If you are ready to get a loan, these professionals can be your key to approval eligibility.

Commercial hard money lenders can be just the experts to help you navigate a non-traditional loan.

Finding the right commercial hard money lenders is key.

What is Credit Risk and How it Can Affect Your Commercial Real Estate Financing

When it comes to securing commercial real estate financing for your business, banks and lenders will typically want to see your credit score and report. That’s because they must determine the credit risk — before deciding whether or not to approve your loan application.

Even if you are considered a credit risk, you still have the ability to be eligible for a loan.

If you are rejected for a loan, don’t give up — you can still seek alternative lending options

How to Prepare for Obtaining Commercial Mortgages

When your company is in need of a loan, whether it’s the first or if you have secured commercial mortgages in the past, there are still many things to consider. There are also a number of ways you can properly prepare to ensure the success of your loan application process.

The key to successfully obtaining commercial mortgages is preparation.

Getting some assistance with your preparation is never a bad thing!

Avoid Making These Mistakes When Applying for Commercial Real Estate Financing

Sure, we all make mistakes, but some are bigger than others and can make a lasting impression on the future and success of your business. When it comes to securing commercial real estate financing, try to avoid making these mistakes.

There are also some things you can do to increase your eligibility and chances of getting your loan approved.

Don’t rush through the process and you will avoid making mistakes

Tips for Determining What Type of Commercial Hard Money Loans are Right for Your Business — Secured or Unsecured

Once you've figured out that you need to secure financing to help your company get off the ground or grow to the next level, there is still more to decide. You it’s important to know which type of commercial hard money loans are best suited for the funding you need for your business.

If you are unsure if a secured or unsecured commercial loan is right for your business, you may need to seek the guidance of a professional commercial lender.

Once you’ve decided which type of commercial hard money loans you need for your business, you can move on to “step two.”

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