By Wade Henderson
Reality - choosing a good Commercial Mortgage Broker can usually save your company money regardless of the fact that you will incur fees to the broker. "Packaging and Placement" of your financing is far more important that any aspect of the Commercial Mortgage broker or Commercial Mortgage lenders role. If your application is not packaged and placed appropriately, you will not get the proper financing if you get approved at all - this is where the experience of your broker or lender comes into play.
In regards to a Commercial Mortgage and Commercial Mortgage Companies there are several factors which have to be taken considered. The appropriate advice can save you a significant amount of time, frustration and money. When using a specialist they will work with you, put the deal together properly and place the loan with the appropriate lender to give you the best value, terms and rate through experience.
A commercial mortgage broker will be able to explain the options of different commercial mortgage types. If you have ever applied for a commercial mortgage, I am sure you know what I mean when I say they are in general quite overwhelming and you should take all the good advice you can find. Commercial Mortgage Companies are different than Residential Mortgage Companies so when it comes to choosing the right loan for your situation the choices go well beyond a fixed rate of interest and a variable rate.
In regards to Fixed vs. Variable rates the fixed rate of interest is great in terms of budgeting each month. For the fixed rate term, as you would expect, the amount you will be repaying is fixed for the term specified. Be aware though, the fixed rate will only be for a specified term of time; one this term expires it will change to a variable rate or require you to replace the loan with another one. Also be aware that most fixed rate of interest Commercial Mortgage Companies have early redemption fees. A Commercial Mortgage Broker will be able to search around with lenders offer a fixed rate commercial loan that fits best.
As I am sure you expect, the variable rate Commercial Mortgages will vary with the market. Federal base rate increases, so will your repayments. If you need to know precisely what your payment will be monthly, this will not be the best option however, be aware that with a fixed rate, you will always be paying a premium to hedge against market fluctuations. That being said, over time, the best type of financing to get, in general, is a variable loan as when markets fluctuate up or down, your rate you will be paying will be less.
Another type of financing to be aware of is interest only. This means that you are only obligated to pay the interest portion of your loan, which will be a lesser amount than if you are paying towards the principle. What this would mean is that when the term of the mortgage has lapsed, you would still owe the entire principle amount of the loan. In general, there will need to be some sort of assurance that you will be able to either convert the principle into a new loan or you will be able to retire the entire principle at that time. For obvious reasons, the restrictions on this type of Commercial Mortgage Loan are more rigid.
Your Commercial Mortgage Broker will be able to determine which will be the best in your situation.
Wade Henderson
Pro-BargainHunter.com
Article Source
Tuesday, July 28, 2009
Monday, July 27, 2009
How to Get a Commercial Loan
By Ken Garratt
Even business owners with 700 and higher credit scores and excellent credit history are now being turned down by their banks for loans. What is a business owner to do? Cut jobs? Slash expenses? Increase marketing? It still takes cash to operate a business.
Some business owners go with credit cards. This is fast and easy to set up. However, the interest rate and fees can exceed 18-27%, taking most of your profits. Investors are another option but there is very little investment money out there for new or even existing businesses right now. If you were to use an investor, they would want at least some control of your business. This changes the dynamic from having "your own business".
Hard money lending, also called asset based lending, is an option if you own your commercial property. You could take out a hard money loan against the property. Interest rates for this are high, usually at least 15% or more, with high points and a short term on the loan. This is expensive money and can be used as a bridge to get through a short cash crunch but does not provide any long term solution.
Any other alternatives? What about a commercial loan broker? A broker is a commercial funding solution specialist. A broker meets with the business owner and discusses your business needs, now and in the future. The broker is able to analyze your financial documents and create a loan application package that focuses on the positive aspects of your business and what your business expects to achieve. Putting together this loan package is critical to the approval process for your loan. The broker also has multiple lenders in every category, and preferred relationships with these lenders.
By submitting your loan package to more than one lender, you will have much greater odds of getting a timely approval and may even have the opportunity to comparison shop for the best offer. In 60 days you won't have your loan come back declined and have to start over. If it is declined by one lender, it may at the same time be approved by two others. Remember, your loan package has been professionally prepared with the expert knowledge of the broker. Approval is more likely.
Just think about it. They put the entire loan package together to show the assets of your business and present it to multiple lenders on your behalf. The broker negotiates with the lenders and gets you your money. So you have more time to run your business.
Ken Garratt writes for http://www.fundingapproval.com When Banks say, "NO" call a commercial broker.
Article Source
Even business owners with 700 and higher credit scores and excellent credit history are now being turned down by their banks for loans. What is a business owner to do? Cut jobs? Slash expenses? Increase marketing? It still takes cash to operate a business.
Some business owners go with credit cards. This is fast and easy to set up. However, the interest rate and fees can exceed 18-27%, taking most of your profits. Investors are another option but there is very little investment money out there for new or even existing businesses right now. If you were to use an investor, they would want at least some control of your business. This changes the dynamic from having "your own business".
Hard money lending, also called asset based lending, is an option if you own your commercial property. You could take out a hard money loan against the property. Interest rates for this are high, usually at least 15% or more, with high points and a short term on the loan. This is expensive money and can be used as a bridge to get through a short cash crunch but does not provide any long term solution.
Any other alternatives? What about a commercial loan broker? A broker is a commercial funding solution specialist. A broker meets with the business owner and discusses your business needs, now and in the future. The broker is able to analyze your financial documents and create a loan application package that focuses on the positive aspects of your business and what your business expects to achieve. Putting together this loan package is critical to the approval process for your loan. The broker also has multiple lenders in every category, and preferred relationships with these lenders.
By submitting your loan package to more than one lender, you will have much greater odds of getting a timely approval and may even have the opportunity to comparison shop for the best offer. In 60 days you won't have your loan come back declined and have to start over. If it is declined by one lender, it may at the same time be approved by two others. Remember, your loan package has been professionally prepared with the expert knowledge of the broker. Approval is more likely.
Just think about it. They put the entire loan package together to show the assets of your business and present it to multiple lenders on your behalf. The broker negotiates with the lenders and gets you your money. So you have more time to run your business.
Ken Garratt writes for http://www.fundingapproval.com When Banks say, "NO" call a commercial broker.
Article Source
Commercial Mortgage Loans - What Are They?
By Anthony Fine
Commercial mortgage loans are executed using real estate to collateralize the loan. Commercial mortgages are similar to residential mortgages, except that the collateral used to secure the loan is a commercial (business) building rather than a personal residential home. If the borrower defaults on the loan, the lender can seize the collateral (building) to recover the loan proceeds.
Commercial mortgage loans are not available to persons, but rather to businesses, which include partnerships, incorporated businesses, limited companies, etc. The business must be sound financially and the process to verify the business income can be more complicated than verifying the credit worthiness of a specific individual. That is why traditional commercial mortgages can take six to nine months to underwrite.
Commercial loans are procured for a variety of reasons: to buy the premises of an existing business, to make improvements or enlarge existing premises, to make commercial and residential investments or to develop the existing property in other ways. An example would be to buy already constructed business premises, like offices, shops, restaurants, or pubs. Additionally, they can also be used to buy business assets such as plant equipment and specialized machinery.
The Interest rates for commercial mortgages are generally higher than those for residential mortgages but lower than interest rates on unsecured business loans. A fixed-rate loan is the most common commercial mortgage. It is similar to the fixed rate home mortgage loan in that the interest rate remains constant throughout the term. However, the term for most commercial mortgage loans is between 3 and 10 years but they can be extended for as long as 25 years.
The commercial mortgage loan amount and interest rate that you can receive is a direct correlation of the credit worthiness assessed by the lender with respect to your ability to repay the loan. If you have an excellent business record with a verifiable profit and loss business statement then you will have little trouble getting a commercial mortgage at an attractive interest rate.
Commercial loans are not provided without extensive scrutiny regarding your business stability and profitability. The Lender usually wants to see your last three years of audited financial statements including a Profit and Loss statement, balance sheet and a cash flow forecast. Favorable business information is critical to the lender and to you because, as stated earlier, if you default on the loan the lender can repossess your property and sell it to repay the outstanding mortgage balance.
The best place to find commercial mortgage loans is on the Internet. There are enormous numbers of commercial lenders vying for your business and they all advertise on the Internet. It is possible to compare many loan quotes side by side and determine which is best for your financial situation.
Mortgage loans can be a confusing and complicated subject for many people. For some straight talk visit Home Mortgage Loans and learn more about the different Types of Mortgage Loans.
Article Source
Commercial mortgage loans are executed using real estate to collateralize the loan. Commercial mortgages are similar to residential mortgages, except that the collateral used to secure the loan is a commercial (business) building rather than a personal residential home. If the borrower defaults on the loan, the lender can seize the collateral (building) to recover the loan proceeds.
Commercial mortgage loans are not available to persons, but rather to businesses, which include partnerships, incorporated businesses, limited companies, etc. The business must be sound financially and the process to verify the business income can be more complicated than verifying the credit worthiness of a specific individual. That is why traditional commercial mortgages can take six to nine months to underwrite.
Commercial loans are procured for a variety of reasons: to buy the premises of an existing business, to make improvements or enlarge existing premises, to make commercial and residential investments or to develop the existing property in other ways. An example would be to buy already constructed business premises, like offices, shops, restaurants, or pubs. Additionally, they can also be used to buy business assets such as plant equipment and specialized machinery.
The Interest rates for commercial mortgages are generally higher than those for residential mortgages but lower than interest rates on unsecured business loans. A fixed-rate loan is the most common commercial mortgage. It is similar to the fixed rate home mortgage loan in that the interest rate remains constant throughout the term. However, the term for most commercial mortgage loans is between 3 and 10 years but they can be extended for as long as 25 years.
The commercial mortgage loan amount and interest rate that you can receive is a direct correlation of the credit worthiness assessed by the lender with respect to your ability to repay the loan. If you have an excellent business record with a verifiable profit and loss business statement then you will have little trouble getting a commercial mortgage at an attractive interest rate.
Commercial loans are not provided without extensive scrutiny regarding your business stability and profitability. The Lender usually wants to see your last three years of audited financial statements including a Profit and Loss statement, balance sheet and a cash flow forecast. Favorable business information is critical to the lender and to you because, as stated earlier, if you default on the loan the lender can repossess your property and sell it to repay the outstanding mortgage balance.
The best place to find commercial mortgage loans is on the Internet. There are enormous numbers of commercial lenders vying for your business and they all advertise on the Internet. It is possible to compare many loan quotes side by side and determine which is best for your financial situation.
Mortgage loans can be a confusing and complicated subject for many people. For some straight talk visit Home Mortgage Loans and learn more about the different Types of Mortgage Loans.
Article Source
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