Beretta Only

Saturday, March 24, 2018

Why You Should Repair Your Credit Score to Obtain Commercial Loans

If you can rebuild your credit score, you have a much higher chance of getting approved for *commercial loans**. Most lenders want to see a clean credit history and a high credit score, so Level 4 Funding offers ways to build and restore your credit to help you get the loan you need.*

Before you can repair your credit, you need to know what state it’s in. First, obtain your current credit report from one of the three recognized credit bureaus. You should be patient and take plenty of time to review your credit report and history. You should also look at your previous business patterns and habits. Do you continue to make the same bad decisions? If you can recognize a pattern with the way you handle your finances, you can change your habits for the better… and begin to improve your credit score. If you have less than desirable credit, it’s going to be a lot tougher to obtain approval for commercial loans, so you should really put all your effort in here. You need to take some time to review your credit history by obtaining your report from one of the three recognized credit bureaus. Really scrutinize your business habits that have led you to earn less than desirable credit. Seeing the report can also help you recognize how you can break these patterns so you can make progress towards improving your credit.

Yes, most people in America have debt and it’s okay — and even good — to have some debt. But too much is… too much. It will make lenders wary about your ability to pay back their loan, and that’s not good when it comes to trying to get loan approval. Try to pay down debts and the amount you owe as much as possible. Take a close look at your financials, your budget and figure out how you can tighten things up so you don’t have to get too far into debt. You can also consider having all your outstanding credit combined onto one card to you can consolidate payments and perhaps even negotiate a better interest rate for your commercial loans. Having just one payment can help you keep track of on-time payments as well.

If you have good business relationships with your suppliers and vendors talk to them about your loan plans and ask them to make a report on your behalf. Make sure you make timely payments to supplier and vendors because being in good standing can help your credit score improve.

If you have any unused, paid off accounts, closing them can affect your credit score too – this can improve your chances of getting approved for your commercial loans needs.

Once again, review your finances, see which accounts you have paid off but that are still open and then for any of those that you are no longer using, send a request letter for those to be closed. You can ask for a return letter from the creditor that proves your account balance is zero and that the account is now closed.

It’s not a quick route to perfect (or near perfect credit).

The bottom line is it takes time to build or repair your credit. However, it's a lot easier to secure commercial loans via traditional lenders if you have stellar credit. Ultimately, it will benefit you and your business, as you will be in a better position to negotiate better rates. Making some big changes in the way you handle your business finances is a must when repairing poor credit. Start small and make little changes that will eventually pay off in a big way. It’s not impossible and though it may take some time, it is worth it once you’ve got your credit on track and you are able to move head with your business with a loan that you secured with your new high credit score!

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 Prepare to Speak to Hard Money Lenders

Being prepared is the best way to ensure that you can get offers from hard money lenders. But the secret is in knowing how to prepare.

It can be very stressful seeking a loan. Many people hate to feel that they owe someone money even when it is for a legitimate loan or mortgage. But being well prepared can help to eliminate much of that unnecessary stress and also can help to ensure that you get the loan that you need. Approaching hard money lenders for a loan is not exactly like going to a bank or a mortgage company to ask for a loan. And in some ways this is very good because the process is less complicated but that can also make it more nerve wracking.

A conventional lender is going to present you with a huge packet of forms to complete and then send you on your way until you have all of the paperwork completed and submitted. But the process of a hard money loan is less dramatic. So you will want to be sure that you are prepared prior to your first meeting so that you can give the lender all of the information that they will request. Not only does this allow you to appear very professional but it will also speed up the process even more.

Hard money lenders are really only interested in the value of the property which is going to be used as collateral on the loan. They don’t want to hear your life story and why your credit score is lower than the average consumer. So don’t volunteer too much but be ready for all of the questions pertaining to the property and your plans for it. The first question is going to be the address of the property, which is easy enough to supply. You will also need to provide a few photos of the property to show its current condition. In addition, you should provide any appraisal that you have gotten or valuation that you have completed for the property. This is the main information that the lender is going to use to determine the current value of the property and what the collateral will be worth to them.

Explain Your Plan

The next information that the lender will want to gather is about your offer price and any proposed renovations that you will be doing. It is a good idea to have a basic business plan in place to show the renovation budget, the timeline and your projected increase in the property value as a result of the renovations. The final piece of the puzzle for the lender is to understand how you plan to repay the loan. Are you planning to keep the property and rent it out? Are you going to sell the property and use the proceeds to repay the loan? And finally they will ask for the exact amount of the loan that you are requesting.

Fast and Easy

Providing all of this information in a single quick meeting not only shows your respect for the hard money lenders time but also shows that you are a well prepared professional. Having a plan and demonstrating it will let the lender know that you are serious and will be getting this loan from him or her or from a competitor.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Friday, March 23, 2018

What it takes to get a Commercial Real Estate Lenders Approval

Knowing what commercial real estate lenders are looking for on an application will be very helpful when you are ready to seek a loan. Some of the information could surprise you.

Getting your loan application approved by commercial real estate lenders requires more information and effort than most first time buyers expect. But the key to understanding this request and the amount of information which is requested comes from taking a look at the loan from a lenders perspective. Commercial real estate loans are often quite large and hold some inherent risk. The lender is simply trying to eliminate as much risk as possible by being restrictive and stringent about their lending policy. This allows them to make their money and well qualified businesses to make their real estate purchases. They use a system which is sometimes called the three C’s to evaluate loan applications.

Collateral is a big factor in commercial lending. All loans are secured by a lien on the commercial property being purchased. This allows the lender the right to take the property and sell it to pay off a loan in the event that the borrowers default on the loan. If you are requesting a loan which exceeds 80% of the value of the property being purchased, the lender might also request that you offer other property or items as additional collateral for the loan. In most cases the lender would like the loan to only be 80% or less of the property value but in some cases they will accept cross-collateralization.

Cash flow is also an important factor to commercial real estate lenders. They need to see that either the property itself generates enough income to cover the cost of the loan payments or they need to see that the business purchasing the property has sufficient cash flow to pay the loan. In addition, commercial real estate lenders like to know that there are cash reserves or other assets which can be easily liquidated should the economy change and cause a decrease in the cash flow needed to make the loan payments.

Your Personal Promise

There are some occasions when the business does not have enough credit to merit a commercial loan or it has questionable credit. In this case, a commercial real estate lender will require the borrower to personally guarantee the loan. To qualify for this you must have a 660 personal credit score or better, no bankruptcy in the last 7 years, no foreclosures or short sales in the past 3 year and no open tax liens or judgements. If you meet these criteria then your credit history and creditworthiness will be considered during the loan application.

Know What Lenders are Looking For

Commercial lenders are looking for a business which is in stable financial condition and has been for at least three years. The lender is also looking for the ability to repay the loan and to have a cash reserve in place if needed. Before you begin a loan application, you should carefully consider how well your business will fare when they are judged on the three C system.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Wednesday, March 21, 2018

The Requirements for Securing Commercial Real Estate Loans

Due to the dollar amount of most commercial real estate loans, the criteria to qualify is more stringent. It’s important to understand these requirements before you apply for a loan.

Not only are commercial real estate loans substantially larger than most other loans, they are also inherently more risky. This increased risk is due to the fact that most businesses financial health is very closely tied to the overall economy unlike the financial health of a consumer which is more insulated. To offset this risk as much as possible, lenders are much stricter about the qualifications for commercial real estate loans.

The first step in securing a commercial mortgage is to have the property appraised. Legally, the lender will need to have this process completed but it is not a bad idea for the borrower to also have an appraisal completed. It is critical that the property value be equal to or exceed the amount of the loan being requested. This is simply because the property will be the collateral for the loan. Most lenders want to see the property value at least 20% greater than the loan amount to ensure that the collateral is always greater than the outstanding balance of the loan.

When a business entity is making the purchase, the lender is going to want to verify that the business is financially stable and has the ability to make the loan payments. The lender will request documentation to verify the cash flow of the business as well as the debt that the business is carrying. Lenders prefer to see a steady net income 20% greater than the debt. It is also important that the business have some type of savings or other assets which are very liquid in the event that the business slows and cannot make the loan payments from the months’ income.

If the business entity does not have a strong credit history or is relatively new, the lender will require the owner of the business or owners to become personal guarantors. This basically means that the business credit history does not merit the loan and the owners are willing to use their personal credit history and scores to obtain the loan. This also means that the owners are willing to use their own personal funds and property as collateral for the loan.

Understand What Lenders are requiring

In many cases there are nonrefundable fees which must be paid to apply for commercial real estate loans. Knowing that your business or your personal credit is strong enough to secure a loan is very important before you begin the long process of a loan application and pay the fees to have the application processed. If you have any questions about the qualifications, you should invest your time in more research.

Due Diligence

There is a lot to understand when seeking a commercial loan and researching the process, the potential lenders and the criteria for securing a loan is a very smart choice. Speaking to a local bank or a mortgage lender is a good way to gather information and learn about the process to help you avoid wasting both time and money if you are not prepared to meet the loan application qualifications.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tips for Landing Commercial Loans

Commercial loans are all about risk. Lenders are looking for some very specific criteria before they are willing to approve a loan application.

Commercial loans are more difficult to get than consumer loans because they are often for a much larger dollar amount. Lenders are in business to make money and that means that they must be very selective when lending a large sum of money. Understanding the criteria that lenders use to evaluate applicants and why they have these standards will help you to tailor your documentation to these criteria and show lenders all of the right information about your business.

Lenders are first and foremost concerned with your ability to repay the loan that you are requesting. They want to see long term documentation in the form of profit and loss statements, bank statements and tax returns to demonstrate that your business is financially stable. The might also want to see documentation about other credit which has been extended to your business. This could be in equipment rental, from a supplier of materials, from a property that has been leased or from a vendor. Lenders also favor a borrower who has some cash in savings to cover expenses in the event of a slowdown in business and revenue.

The next big interest for a lender is that the commercial property that you are purchasing has a value greater than the loan which you are requesting. This is because the property will serve as collateral for the loan. In the event that you default on the loan, the lender will take possession of the property and sell it to cover the outstanding balance of your loan. In most cases the loan will only be approved for about 80% of the property’s current value. This is due to the volatility of commercial property values. Having that instant equity in the property assures the lender that even if the property value drops, the loan will still be adequately secured.

Becoming a Personal Guarantor

In some cases a business entity does not have sufficient credit history to demonstrate financial stability. When that is the case commercial loans are secured by a personal guarantor which is normally the owner of the business. The owner needs to be able to demonstrate to the lender that their personal assets and money can be used to cover the loan payments. Again, the lender will need to see documents including bank statements, tax returns and personal net worth statements to verify the guarantor’s finances.

Understand the Lenders Goal

In almost every case, a lender is simply looking at numbers to determine if a loan applicant is a good risk. Knowing this information, it is critical that you show repeatedly that the business is financially stable, has a strong and steady stream of revenue and that you are also financially stable. In addition showing that the business has sufficient cash reserves to bridge a short term cash flow issue will give the lender added confidence in your ability to repay the loan that you are requesting. Approval for commercial loans is based on ability to repay the loan and the financial stability of the business in almost all cases.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Understanding the Logic behind the Process of Commercial Real Estate Loans

Getting approved for your first commercial mortgage can be a challenge. The best way to ensure a successful loan application is to have a good knowledge of commercial real estate loans.

There is a lot more to obtaining commercial real estate loans than you might first think. The process is more complicated and lengthy than even the most difficult residential home purchase. But because of the significant amount of money involved and the added risks, lenders are much more selective when it comes to approving an application.

Technically, commercial real estate loans are secured by liens on the property which is being purchased. That property is the lenders security and ability to recover their money if you default on the loan. But there are additional factors which make commercial real estate loans much more risky than a residential loan. First, commercial real estate values can fluctuate very rapidly. This can leave a lender repossessing a property which is worth far less than the remaining balance on the loan. In addition, the business which is purchasing the property has a greater chance than a consumer of suffering financial hardship as a result of a sudden change in the economy.

Because of the increased risk that the lender is facing, interest rates are higher and loan terms are shorter on a commercial loan than they would be on a consumer loan. Most commercial loans are for a ten year period or less as opposed to a residential mortgage which can range from 15 years to 40 years in some cases. And even with these shorter terms the interest rate for a commercial loan is about 1% higher. Commercial lenders also require a 20% down payment in most cases. This gives the added security that the property will always remain greater in value than the amount of the outstanding balance of the loan.

The Application Process

When applying for a home mortgage, borrowers must be able to demonstrate that they have the ability to afford the monthly payments and that they have steady income. Commercial borrowers much also prove that there is a means of making the loan payments. But because a business is more reliant on the overall economy, they must show that the business is in good financial health, that it is being managed well and that it has sufficient cash reserves to weather a financial down turn or hardship. In some cases, the owners must also include their personal financial documentation if the business has poor credit, no credit or has not been in operating for more than 5 years.

Understanding the Lending Process

All lenders are in business to make money. Understanding that fact makes it easier to understand why commercial lending can be difficult to secure. The increased risk that the lender faces needs to be rewarded with higher interest and shorter repayment terms. In addition, the lenders are more careful about the creditworthiness and the financial health of the borrowers. With the economy having a bigger impact on businesses, lenders want to verify that a business is stable enough to survive a short economic crunch or down turn in business. Know this information and creating a loan application package that demonstrates your financial stability will greatly increase your opportunities for commercial financing.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tuesday, March 20, 2018

Criteria for Selecting Commercial Lenders

Evaluating commercial lenders can be a difficult task. But preparing a list of criteria to use for selecting the best lender to meet your needs can be a great time saver.

As a business professional, both your time and your money hold a great deal of value. So it is important to find a lender who will meet all of your needs. Ideally, you will be able to evaluate enough commercial lenders to select a few to forge long term relationships with to ensure continued financial prosperity. The process will undoubtedly take some time but the long term benefit will be a good working relationship with a primary lender as well as other secondary reputable lenders.

Commercial lenders are all about money. You would not be seeking a commercial lender if you did not need money. But you should look at these relationships as you would any other vendor who is supplying a good or service to your business. You need to compare the merits or the service each lender is willing to provide to you. This means what type of fee structure are they offering, what is the interest rate and how quickly can they deliver on their product; your loan funding.

You will also want to evaluate the core qualities of the lenders existing clients. Do they cater to a certain industry or type of loan? Do they have a specific loan size that they tend to service? Are they familiar with your business and the type of loan that you are looking for? All of this information will help you to determine the level of responsiveness and the quality of the service that you will receive if you do business with the lender. Customer service might not jump out as an important factor when securing the loan but if you ever have an issue or want to restructure your loan, then customer service could be one of the most important features the lender offers. Think long term for customer service and product lines available. Meeting your long term needs with a single lender will save you a great deal of time in the long run.

Comfort and Compatibility

Think of your lender as a strategic partner. You will need to discuss confidential financial information as well as other proprietary information about your business. It is important that you are working with a lender with whom you have a certain comfort level. The more honest and up front you can be with your lender the more benefits they can provide to you.

Invest Time to Evaluate for Long Term Success

Creating a list of criteria to evaluate commercial lenders will require an investment of your time today. But the benefits will continue to reward you each time you complete a new loan from your lender or seek advice. Carefully consider the fees and interest rates associated with the different lenders, but also recognize the added value that customer service and fast response time can add to your relationship. Knowing that you have a lender who will meet all of your needs for the long term is worth the time involved in a careful selection process.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Beretta Only

Saturday, March 24, 2018

Why You Should Repair Your Credit Score to Obtain Commercial Loans

If you can rebuild your credit score, you have a much higher chance of getting approved for *commercial loans**. Most lenders want to see a clean credit history and a high credit score, so Level 4 Funding offers ways to build and restore your credit to help you get the loan you need.*

How to Prepare to Speak to Hard Money Lenders

Being prepared is the best way to ensure that you can get offers from hard money lenders. But the secret is in knowing how to prepare.

Explain Your Plan

Fast and Easy

Friday, March 23, 2018

What it takes to get a Commercial Real Estate Lenders Approval

Knowing what commercial real estate lenders are looking for on an application will be very helpful when you are ready to seek a loan. Some of the information could surprise you.

Your Personal Promise

Know What Lenders are Looking For

Wednesday, March 21, 2018

The Requirements for Securing Commercial Real Estate Loans

Due to the dollar amount of most commercial real estate loans, the criteria to qualify is more stringent. It’s important to understand these requirements before you apply for a loan.

Understand What Lenders are requiring

Due Diligence

Tips for Landing Commercial Loans

Becoming a Personal Guarantor

Understand the Lenders Goal

Understanding the Logic behind the Process of Commercial Real Estate Loans

Getting approved for your first commercial mortgage can be a challenge. The best way to ensure a successful loan application is to have a good knowledge of commercial real estate loans.

The Application Process

Understanding the Lending Process

Tuesday, March 20, 2018

Criteria for Selecting Commercial Lenders

Evaluating commercial lenders can be a difficult task. But preparing a list of criteria to use for selecting the best lender to meet your needs can be a great time saver.

Comfort and Compatibility

Invest Time to Evaluate for Long Term Success

About Me

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Blog Archive

Saturday, March 24, 2018

If you can rebuild your credit score, you have a much higher chance of getting approved for commercial loans. Most lenders want to see a clean credit history and a high credit score, so Level 4 Funding offers ways to build and restore your credit to help you get the loan you need.

Being prepared is the best way to ensure that you can get offers from hard money lenders. But the secret is in knowing how to prepare.

Explain Your Plan

Fast and Easy

Friday, March 23, 2018

Knowing what commercial real estate lenders are looking for on an application will be very helpful when you are ready to seek a loan. Some of the information could surprise you.

Your Personal Promise

Know What Lenders are Looking For

Wednesday, March 21, 2018

Due to the dollar amount of most commercial real estate loans, the criteria to qualify is more stringent. It’s important to understand these requirements before you apply for a loan.

Understand What Lenders are requiring

Due Diligence

Becoming a Personal Guarantor

Understand the Lenders Goal

Getting approved for your first commercial mortgage can be a challenge. The best way to ensure a successful loan application is to have a good knowledge of commercial real estate loans.

The Application Process

Understanding the Lending Process

Tuesday, March 20, 2018

Evaluating commercial lenders can be a difficult task. But preparing a list of criteria to use for selecting the best lender to meet your needs can be a great time saver.

Comfort and Compatibility

Invest Time to Evaluate for Long Term Success

If you can rebuild your credit score, you have a much higher chance of getting approved for *commercial loans**. Most lenders want to see a clean credit history and a high credit score, so Level 4 Funding offers ways to build and restore your credit to help you get the loan you need.*