Since the financial crisis of 2008, obtaining a small business loan has become increasingly difficult. Find out about alternative funding from a hard money commercial mortgage broker.
According to the U.S. Small Business Administration, over 50 percent of small businesses fail within the first five years. What does that imply? If you’re a cup half-full type of person, your first thought is, “Hey! That means that 50 percent of small businesses make it!” Good for you. You are a born entrepreneur. Consider the words of Jeff Bezos, founder and CEO of Amazon: “I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.”
One of the main reasons that small business fail is that they do not have the capital to sustain them. How much does your business require? To a large degree that depends on its operating cycle. In other words, your accounts receivable, accounts payable and inventory analyzed by the average number of days it takes to collect, pay and turn over a sale. In most cases, when starting up, you need working capital in order to fund your accounts receivable and inventory because accounts payable will not cover the expense. This same scenario happens to veteran businesses as well when working capital is needed for seasonal inventory build-up or a sudden and unexpected growth spurt has left them with little resources.
In order to determine how much money you will need for your enterprise, consult with suppliers in your area. Do comparison shopping and consider lease options instead of outright purchases. Ask about credit terms and start-up inventory packages. Business start-up guides are good resources to give you a general idea of costs that you may have not considered. A business plans and budget are mandatory. And think ahead with a financial forecast.
Obtaining Funds from a Hard Money Commercial Mortgage Broker
Finding a bank willing to make a small business loan can be difficult in the current market. Since the 2008 financial crisis, banks have demonstrated a 20 percent decline in small-business lending. Raising funds from an angel investor can take time—six months or more, and requires developing a business pitch and making a presentation to several angel groups until finding the right investor. A hard money loan from a commercial mortgage broker, on the other hand, can be obtained in a matter of days and relies on collateral to secure the debt more than credit history. These short-term loans may be extended for up to five years or be repaid in as little as three months for those that are looking for a quick turn-around. Bridge loans are short-term loans that “bridge the gap” between money needed now and capital that is coming in later. It may be an ideal solution for increasing inventory or unexpected equipment expenses. These loans are best used when waiting for permanent financing or accounts payables are expected.
An experienced hard money lender can talk with you about the best options for your business.
Do your homework and work with someone that has been in the business for quite some time. A hard money commercial mortgage broker needs to spend years making contacts and developing his true and trusted rolodex of investors. Call us a Level 4 Funding to discuss your needs and see if we have the solutions. Our loans range from 3 to 60 months and we offer quick no obligation quotes.
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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