Commercial Hard Money Lender

Commercial hard finance provider is a company or a private person loaning financial support. Often money-making hard cash loans are being issued with a higher interest rate than the traditional hard cash loans. Commercial hard money loans are usually being given for a short period of time and sometimes they are called bridge loans or bridge financing.

As traditional commercial hard money loan programs are very risky and have a higher than average loans likelihood of default, money-making hard finance providers offer a wide range of requirements on the type of real estate, special loan-to-value percentage and the certain minimum loan size for a money-making hard cash loan.

Bridge lender programs and commercial hard money loans:

Bridge lender programs and money-making hard cash loans are similar to the traditional hard money in the part of terms of the interest rates and loan to value requirements. A commercial hard cash lender or a bridge lender could usually be described as a strong financial institution with a large deposit reserves. Making a discretionary decision on a not conformed loan is totally in his power. Usually money-making finance providers (or borrowers) not conforming to the standard guidelines of a residential conforming credits.

And because of the fact it is a commercial property, commercial hard cash loans usually also do not conform to the guideline of the standard commercial loans. It is the usual and absolutely normal situation if the borrower is in a temporary financial distress or has just a building permit in place. The commercial property may not be in a good and marketable condition for a number of reasons; it may not be completed after the process of construction or reconstruction etc.

Some commercial hard cash lenders (bridge capital groups or private investment groups)could require some sale-lease back requirements or the joint venture to create an additional background for such a risky transaction that has a really high default rate. It is really usual situation when money-making hard finance providers temporarily offer hard or bridge money, allow the owner of the property to buy back his property within only a certain (as usual, not long) time period. If the property was not bought back by purchase or if it was sold within the period of time the money-making hard finance provider would get a right to keep the property at the agreed to price. In the case of default the property owner may lose the property to foreclosure.

Commercial Loans - Bad Credit

Commercial loans for borrowers with bad credit are limited to a few options. Often borrowers find themselves in very difficult positions as many traditional and nontraditional banks will not even look at their loan request if their score is below a 650. Too often the borrower's credit score is unfairly reported as many commercial borrowers have great credit history, but because they have multiple mortgages, multiple lines, etc. their score is erroneously brought down even though they have never been late on a single payment. We see it all the time.

Options for borrower with bad credit are, in general limited to 3 options - SBA commercial loans, commercial hard money and "story" lenders.

SBA commercial loans carry a lot of misperception by borrowers. The biggest and most important for you to know is that NOT all SBA lenders are the same. And more to the point, the SBA never actually loans any of its own money. They only guarantee banks that they will be paid back if the borrower defaults. So the point is that the banks make up most of the underwriting criteria. There is NO minimum credit score that the SBA mandates. For example we work with a bank out of New Jersey that will often fund SBA commercial loans with borrowers credit score in the low 500's.

Commercial hard money is probable the first thought for many when considering a commercial loan with a borrower that has bad credit. Most hard money commercial lenders are interested in the properties equity and or its cash flow and the borrower's credit score is often just an afterthought.

Commercial Hard money lenders want to see at least 40% equity in the property or a 60% loan to value in order for them to seriously consider funding the deal. Speed and flexibility with underwriting are the highlights of commercial hard money. The expense is the downside. Borrowers should expect to pay 3-6% points and have a rate around 13-16%.

"Story lenders" are banks that are willing to listen to the borrower's story about their difficult situation.

They are often willing to overlook many difficult situations such as bad credit, weak business cash flow, high loan to values, etc. Although there are few banks that would describe themselves as a story lender the borrower should look locally or work with professionals in the business that may know of a few banks that can get over their difficulties.

For example, we recently closed a loan that was in foreclosure by refinancing it with another bank that was more willing to listen to the borrower than their existing bank. Their situation was that their loan had ballooned and despite their best efforts they could not get their existing bank to refinance the loan or find another bank that would either. After a year of searching they couldn't get it done and their existing bank put more pressure on them by calling the "note" (forced foreclosure). We knew of a bank out of California that would be interested, provided the borrower refinance some of their unsecured business loans into the proposed loan to improve the borrowers over all cash flow.

So, borrowers with bad credit seeking commercial loans should be prepared for some "brain damage" as they will have to find a viable source after hearing many "no's".

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $4.95! Check it out commercial real estate loans or commercial mortgage broker store or commercial loan rates

Startup Business Financing

Before you start to obtain startup business financing, it is very important that you determine the approximate amount that you will require. The current assets minus current liabilities will be the working capital of the business. Most of the time, you can see such information in the balance sheet and through this you will be able to know how much money will be required to carry out your business on a short-term basis.

Having found out the amount of startup business financing required, you will have to think of a way in which you can get a loan for your business.

o Start-up Financing is available to entrepreneurs whose business is based on a solid business model with a credit worthy structure. o Banks award business loans to those that have a well spelled out plan which showcases your partners, your track record, your strategies and advantages.

Banks are conservative where investments are concerned. The chances of getting a loan will be more for an existing business in comparison to a new one.

o No bank wants to lose money by taking risks. If your business proposes to be a risk, you'll have to work harder to get your small business loans approved

On the other hand, you will be able to acquire a startup business financing loan if you make a good loan request and have a good plan for your business. Help can be obtained from the SBA as well as the Small Business Development Centers can be obtained easily, as they are situated in most major cities in the United States. Your business plan must consist of your personal bank statements, sales and cash projection. If you are taking the help of the SBA then you will need to state how you will reimburse the startup business financing loan and you will also be required to guarantee the same. The bank might want to see your personal investment in the business apart from the time that you give to the business.

o Banks would want to know your business's financial prospects. They want to gauge its worth and how much money you're moving. o Alternative sources, (excluding banks) may want you to "pay" more for your start up business loan. o You may have to pay higher interest rates. You might also need to offer some equity in your business to receive funding

Ways in which you can get loans faster and easily

Financial assistance sometimes comes from institutions in the form of credit or loan. This loan can be obtained at a relatively short period of time and there are financial resources that will help you get the loan. Few of such startup business financing resources are:

- Credit cards: You can get a credit ceiling of twenty thousand dollars (for your small business) from big credit card companies if you have a good credit record. - Unsecured business loans: Try such a loan if you do not want to guarantee the loan personally or if you do not have a credit record. - Equipment leasing/financing: Many companies are willing to lend you the money taking equipment as collateral for your loan. - Asset based loan: is ideal for using equipment to acquire loan, account receivable or leveraging your stock.

o Those having a mortgage with a bank, find it easier to obtain small business loans. o Check newspapers for financing offers. Such institutes grant small business loans and processing might be easier with them. o Availing a start up business loan has become easier, thanks to a growth in competition among lenders. o Plenty of channels are available for raising capital. Most of the above avenues have abundant variations. Build up a solid business plan, along with a financial adviser, and just start asking.

Do not forget to check your financial requirements regularly and inform the investors about the financial position as well as the progress of the business on a regular basis.

Hi, I'm Akhil Shahani, a serial entrepreneur who wants to help you succeed. If you like to work smart, check out http://www.SmartEntrepreneur.net It's full of articles and resources to help you start and grow your business successfully. Please visit us & download our special "Freebie of The Month" at http://www.smartentrepreneur.net/freebie-of-the-month.html