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Commercial Real Estate Investing

January 3rd, 2009

As the bottom has split over residential real estate market, investors of real estate have diverted their attention to commercial real estate investing. There are loads of advantages of commercial real estate investing. In fact, through commercial real estate investing, a savvy investor can avail of varieties of options. Let some light be thrown on some of these options.

Invest in retail shopping as a portion of a joint venture with numerous other investors: Such a thing would enable you in having taken lesser risk and obtain some experience with regard to commercial real estate investing without having lost money. Ensure that you get apprised about the partners, along with property which you would be buying.

Novel Construction: If you happen to be a general contractor or project manager, you might be able to swing new construction of commercial real estate till you are aware of different codes. Remember that commercial real estate investing with regard to new construction is diverse as compared to residential novel construction. There are numerous building codes with respect to commercial constructions which differ from one municipality to the other. You are required to be familiar with codes while having built commercial property.

Refurbishing or rehabbing older constructions and having them prepared for commercial use: Again, some knowledge is required regarding building codes. You can also buy free-standing store or storefront property and have it leased into business. You are required to know regarding location, ensuring that a solid lease is made with a stable and reliable renter. Furthermore, you can proceed with reaping a profit relating to rental income at the time of paying off property.

The above-mentioned instances can be summed up as commercial real estate investing. You should remember the following three aspects regarding commercial real estate investing, irrespective of your decision. These include location, location, and LOCATION! It’s an age-old, well-known saying. However, it deserves this repetition as it’s so integral with regard to any kind of investment in terms of real investment, residential or commercial. If you happen to buy storefront within a blighted region, it might seem to be cheap. However, until you have worked in that store every day, worrying about getting murdered or robbed on a daily basis, it’s better stay away from the blighted regions.

You need to ensure that there’s a requirement for commercial real estate. Accordingly, you must plan the development or the place where you intend to invest. Office complexes and buildings are typically always in full demand as people are generally looking for cheaper office space. In ancient cities and towns, there are regions where age-old homes have been turned into stores and office buildings. In various historic districts in the towns, an effort has been made to refurbish ancient homes and have property value increased in that area. Such a thing would also prove to be ideal for the people giving a thought to commercial real estate investing.

Business Loan

Commercial business financing

December 30th, 2008

Commercial business financing is a very good method of financing your business. Once you start your business you will need some extra finance for expansion of the business. You can make money for your business if you have some money to invest. Generally, your money is exhausted by the time you start your business. The initial start-up process eats into your finance.

At this point commercial business financiers come into the picture. Before going in for commercial business financing, you have to identify your purpose of going in. Generally, business finance is used to acquire some assets for the growth of your business, such as

• to fund a research and development program.
• to expand your current distribution market.
• to purchase new equipment or land for your business expansion.

Once you have identified the reason for additional commercial business financing, you have the option of going to either banks or private commercial business financiers.
If you have a small business, bank overdrafts can be the most important source of your commercial business financing.

Commercial business financing is done after looking at many things. There are many aspects involved in commercial business financing. The first thing that is looked into is your business plan. Your income tax returns also play a major part in processing commercial business financing. Conservative lenders such as banks look at your balance sheet in detail before processing your application.

You have to convince the commercial business financer about your need of the funds. Your application should give the trust that you will be able to repay your loan. Commercial business financing is done on the strength of your proposal. If the figures show a good rate of growth and your income tax returns show a steady growth, then getting commercial business financing becomes easier.

You should work with a very experienced person for commercial business financing. If you do not have an expert to guide you, then you may have to pay a huge amount of money. The clauses of cash flow, the penalty clause for refinancing, etc., could be substantial. Sometimes you are not aware that there is a clause in your commercial business financing deal that the lender can recall the money under specific conditions. If you are not aware of it then you may incur huge loses.

Commercial business financing is a lucrative business now. There are many self proclaimed businessmen doing business of commercial business financing. You should avoid inexperienced people totally.

Sometimes the lender asks for cross collateral before he gives you the money. That means you have to pledge your personal belongings such as your home as collateral for your business loan. It should be avoided. There are other ways to ensure that you will be repaying your loan.

One of the ways is to use your invoices as collateral. If you can show that you have invoices for a substantial amount, then the commercial business financer can give finance against your invoices. If you are in wholesale or distribution business you can get commercial business financing against the orders you have in hand but no money to fulfill it. The commercial business financier can do that for you, and the rest of the money will go in your account.

There are ways to get your business the much-needed boost. All you have to do is to look around for the best possible way to do it!

Business Loan

Commercial Office Building Loan

December 25th, 2008

Most people try to look for various types of properties. Some seek real estate property for their personal use, whereas others look for an appropriate real estate property for commercial purposes, like building an office. However, this search doesn’t stop with just finding an appropriate real estate property. The main problem here is the financial problem. At times you may not desire to invest a lot of money into the property because there are many other costs associated with it. However, there are explanations for this kind of problem, such as commercial office building loans that enable you to get huge sums that you can use to purchasing a commercial real estate property.

Commercial office building loans are normally offered by loan lenders for buying real estate properties, equipment, and for meeting other operational costs. These types of loans normally possess low rates of interest that range from 6 to 13%. Therefore, commercial office building loans are considered to be one of the most helpful tools to improve and establish a business. Some of the benefits of using commercial office building loans include businessmen engaged in refinancing, acquisition, and construction of real estate properties. Commercial office building loans are secured loans which are normally secured with collateral as a security against the loan amount. Almost like the home mortgage loans, the repayment period for these loans is also limited. Normally 2% of arrangement fees are charges on these loans.

Commercial office building loans are available either in adjustable- or fixed-rate office building mortgage loans where the term of repayment usually varies from 10 to 30 years. Commercial office building loans usually offer flexible repayment alternatives compared to traditional home loans. Consumers can easily pay the loan on an annual, quarterly, monthly, or biweekly basis. Most of the loan lenders offer fixed interest rate only period. The repayment of commercial office building loans can be made easily by receiving extra funds from the assets you have purchased by utilizing the loan amount. Qualifying for a commercial office building loan can be a difficult task. However, loan lenders usually look at the resale value of real estate, income resources, credit history, creditworthiness, and the income made from the real estate.

The minimum amount that is available through commercial office building loans usually varies depending upon the lender, and it may fall between $100,000 and $250,000. The maximum loan amount that is available through commercial office building loans is unlimited, however it depends on the security. Most of the loan lenders offer 70 to 90% value of the real estate property as the maximum amount. Most of the online commercial office building loan providers usually offer these loans, and these include portfolio loan lenders like credit companies, life insurance companies and banks, non-bank loan lenders, government sponsored enterprise, and conduit loan lenders. Normally, life insurance companies and conduit loan lenders offer long-term commercial loans. The minimum loan amount, interest rate, and the term of interest available defer with the loan lenders.

Business Loan

Commercial Loans in Nebraska

December 18th, 2008

Nebraska has a lot more to offer business owners than the vast corn fields that it is known for. Although, agriculture is a big part of the state’s economy and if you are in the business of investing in agriculture, you may want to think about checking out what Nebraska has to offer. There are a lot of options that are available to business owners who have an agricultural background and know how the farming communities operate.

When you are seeking out a lender to help you get loans for commercial property, you should be aware that there are documents that may be requested of you at the time you apply for the loan, or anytime during the process. Each commercial lender may require different or additional documentation depending on the kind of the commercial loan and the personal history and operations of the business. In addition to the general financial information and documents that are requested by lenders and bankers at the time of the loan, if you are pursuing an agricultural loan there may be additional information that is requested of you. You need to have a solid background and understand of how the agricultural system works and have a detailed business plan available to show lenders.

Depending on what kind of business you have and what your individual needs are for financing and commercial lending, bankers and lenders in Nebraska will generally try hard to work with you to find a loan product that is best for you, your business and what will be acceptable for you to work with in the future. You want to make sure that you are not going to be getting in over your head with whatever funding and loans you take out. While most types of loans are secured by the property that is being purchased in commercial loans, there can be additional collateral that is needed to secure the loan. This is especially true if the loan is a large amount and for certain types of commercial loans such as agricultural loans. Agricultural loans typically have a little bit different set up as far as terms and interest rates are concerned, and the best thing to do when you are ready to apply for a loan is work closely with a qualified lender or banker that can help match you with the best commercial loan product.

Another aspect to consider is how much capital you have in your business. The amount of capital that you have in your business can have a direct influence on how lenders approve your commercial loans. It can also make a difference in the types of loans that you qualify for and the rates and terms on those loans. Some commercial lenders and bankers in Nebraska and all over have started to require that a business has an adequate amount of working capital in their business and this can help them make sure that the business is stable enough on their own to be able to afford a new loan and payments while still maintaining their operational expenses. You want to make sure that you do not take out more funding then you can afford to pay. Building and keeping enough good credit for your business can have a big influence on how your business will be able to get loans in the future for your commercial purposes.

Business Loan

How To Find Commercial Mortgage Finance

December 16th, 2008

There are a large number of advantages of commercial mortgages, and they can be used for making investments with different types of properties. While investing with certain real estate properties tend to be profitable, some others may involve huge risks. Irrespective of the type of property being invested in, one has to locate a commercial mortgage that would help in getting the necessary money required for making the investment. People do not have to worry too much about how to find commercial mortgage finance, as there are a very large number of finance companies that provide people with commercial mortgage finance.

If people decide to proceed with their interest in making investments in real estate properties they need to have knowledge about how to find commercial mortgage finance. There are many financial institutions and banks that provide commercial mortgage to people and by searching with these commercial lenders, people will be able to find the necessary financing that would help them to invest in real estate properties.

The internet has changed the lives of people in many different ways, and people nowadays are able to benefit a lot by using the services of the internet. The internet is seen be very helpful in letting people gather useful information on how to find commercial mortgage finance. There are innumerable websites that are seen to be dedicated towards helping people understand financial issues. By visiting these websites it will be very helpful for interested individuals to gather more information on how to find commercial mortgage finance. Many finance companies have their own websites on the internet, which would help the people in locating a convenient commercial mortgage for their needs.

There are commercial mortgage brokers, who can be approached by the people, when they want to gather more information on how to find commercial mortgage finance. These brokers are extremely knowledgeable about the changing facades of the financial condition, and as a result know which type of commercial mortgage would be suitable for making investments in a particular type of property. All types of commercial mortgages are not suitable for investing in particular real estate properties, and this is why people must try to obtain the services of a commercial broker in order to find the commercial mortgage that would suit their needs.

People can also form an idea on how to find commercial mortgage finance, by holding discussions with those people, who have already used commercial mortgages for investing in real estate. By listening to their tips and suggestions, it is possible to find some useful information, which would be of great help when searching for a commercial mortgage.

Thus one can gather information on how to find commercial mortgage finance, from a large number of sources. They should try to follow those suggestions, which they feel would be useful for locating the best commercial loan that fits their requirements. Until and unless the suitable loan is located by the people, they will not be able to make any investment in real estate properties.

Business Loan

Bailouts Shatter American Economy

December 10th, 2008
Demotivational Bailout Poster Cartoon for Detroit Big 3 Automobile manufacturers

The effect of the bailouts on American entrepreneurs has been horrific and the damage is only just beginning. The United States government is stealing money from hard-working American taxpayers and giving their money to corrupt, poorly run companies. How will future inventors, entrepreneurs and investors be motivated to create great new products and services if they know the government will just steal the bounty of their efforts and give it to criminals?

The $700 billion dollar bailout of financial companies, the $34 billion + for Detroit automobile companies and the hundreds of billions that the Federal Reserve & Treasury are giving away from it’s other loan programs is a burden that is breaking America’s back. The actual monetary amounts, while huge, don’t matter that much compared to our many trillions of dollars owed on the national debt, but this is the FIRST TIME IN AMERICAN HISTORY that free market principles have been completely and totally rejected in favor of a centralized government that hands down decisions on production & distribution.   Welcome to the new American Soviet Union. Enjoy your stay in the Alaskan Gulag.

To assist you in having a more fun during your Alaskan Gulag stay, I have provided a bunch of funny demotivational bailout posters and funny bailout cartoons below for your enjoyment.

Financial Institutions Bailout paid by YOU!!!

Financial Institutions Bailout paid by YOU!!!

I really, really hate that the government is reaching into my pocket to finance these big companies that are terrible at doing business. Here’s another free funny demotivational bailout cartoon to cool your rage.

Detroit Auto Companies (Ford, GM & Chrysler) Demotivational Poster

Detroit Auto Companies (Ford, GM & Chrysler) Demotivational Poster

If your rage at the criminals running our country (Paulson, Bush, Cox, etc) is still burning hot, don’t worry I’m coming with more funny demotivational bailout pictures!

Finance Bailout Demotivational Posters & Pictures

Finance Bailout Demotivational Posters & Pictures

The Detroit automobile manufacturers have run their companies terribly since the 1970’s and now that they are finally burning through their last reserves of capital, they have turned to Uncle Sam to give them more cash to burn. Will they spend your money wisely? Of course not! They did not even spend their OWN money wisely. The Big 3 automotive manufacturers based in Detroit, Michigan (Ford, Chrysler, GM) pay their average worker $73 per hour.  Aren’t you happy that the taxes out of your $10 per hour paycheck are going into the pockets of corrupt businessmen and lazy auto workers in Detroit?

Government bailout demotivational posters

Government bailout demotivational posters

Our financial friends are much worse than even Detroit…. because they did so much more harm to the American economy and refuse to take responsibility for their actions.  Basically, the executives and managers of these financial firms took on a ton of extra risk without proper shareholder oversight and made tens of millions for each person.  Remember the last 10 years with all the news headlines of finance companies executives taking home $30, $40, $50, even $60 million annual paychecks?  Yeah, they made that money by taking on monstrous amounts of risk and gambling with other people’s money.  When their enormous bets went bad, instead of losing everything they owned to shareholder lawsuits, they got their filthy fingers into your wallet and pulled out what will amount to several trillion dollars to cover their losses.

Funny Kitty Demotivational bailout poster!

Funny Kitty Demotivational bailout poster!

The massive bailouts of the finance and automotive sectors are going to spread to many other parts of the economy and our beloved country itself will be bankrupt within the next two decades.  At that point, there will be no one left to bail out all of us taxpayers.  Say hello to the Second Great Depression in America!

Demotivational poster of bankers

Demotivational poster of bankers

Our country is in deep trouble. Do any of you have any ideas for what we should do to fix it?

Funny demotivational poster of government bailing out business

Funny demotivational poster of government bailing out business

Business Loan

Business Franchise Loan

December 7th, 2008

In order to start with any business venture, the first and foremost thing that one needs to have is the capital, without which it is impossible to start any business. The capital money tends to be very high, and it is not easy to arrange for that money without applying for a loan. Finance companies are seen to provide people with different loans for different types of business ventures. If a person is interested in buying a business franchise, then taking a business franchise loan, will definitely be of great help for the people. The loan would provide the people with enough money with which they can buy a business franchise.

Business franchise loan can be obtained quite easily from one of the many financial institutions that are seen to provide both commercial and residential loans. One can also get hold of information about any other party that is interested in lending money in order to buy a business franchise, from the company, which is selling a business franchise. Irrespective of the source from where a business franchise loan is obtained, obtaining the loan tends to be a little tough. When compared with other forms of commercial loans, it has been noticed that a business franchise loan tends to involve very high amounts of money. As a result the lender will need to be assured that the borrower has the capability to repay back the loan in time.

In order to obtain a business franchise loan, an individual needs to have a good credit report and have sufficient assets that can act as a sort of security. This helps to assure the finance company that their money will not be lost, even in case the person taking the loan is unable to repay the loan. However for a person who has a little bit of trouble with their credit report and not enough assets to back their demand for a business franchise loan, things will tend to be very difficult. The finance companies would not easily provide them with the money, they would need to start their business.

In order to obtain a business franchise loan easily, the choice of franchise business, in which a person would be putting their money also tends to be very important. If they are interested in buying a business franchise, with products that are very popular in the market, their chances of getting a loan becomes quite easy. The finance company should be provided with enough details about the franchise, which would be bought by the loan money. The lender should be able to get the idea that you will not face any trouble in paying back their loan, if you desire to find a loan to buy a business franchise easily.

There are innumerable sources for getting loans, if a person is interested in buying a business franchise. Before choosing any particular finance company, it is suggested that the lender should study all their options, in order to find the best business franchise loan for their requirements.

Business Loan

Salem, Oregon Commercial office building loans

December 6th, 2008

Few other American cities offer the combination of natural resources and commercial amenities as Salem does. With 70% of all Oregonians within an hour’s commute, Salem’s Holy Grail is its water, ranked the purest in all of America. Short commutes, pure air, plentiful green space, and abundant useable land make Salem an extraordinary conurbation for living, working, and doing business.

Excellent recreational facilities, like fishing, windsurfing, camping, hiking, rafting, and all-season skiing being within a 2-hour commute, Salem offers its residents recreational opportunities for all tastes. This coupled with the presence of some of the best schools in the state, means abundant supply of a skilled and willing workforce. In a nutshell, it’s a rare mix of abundant real estate, world-class education, skilled labor market, strategic location, and a healthy demography which only rationalizes the idea of doing business here beyond all doubts.

Despite all the reasons why investing in Salem makes great business sense, one must not forget that sourcing an office space is still a daunting task for the investor like anywhere in America. However, Salem, like any other business center, has a number of professional resources that help raise commercial office building loans in Salem with ease. One must study the various solutions available in order to make an educated decision.

Eligibility and availability of commercial office building loans in Salem heavily depend on the financial health of the business promoters. The shareholders, who also choose to become the signing guarantors, must present their financial documents for validation. All fine prints need to be understood thoroughly before signing the dotted lines as the stakes are high and critical in a commercial office building loan. This is essentially due to the commercial property being significantly more expensive than its residential counterpart.

As is the case with regular loans, commercial office building loans in Salem also depend heavily on the applicants’ credit rating, history, and financial health for approval. Strong documentation remains the key to successful approval. Moreover, having some well-established commercial credit on file at the time of application, helps a great deal. At a very basic level, the applicants must keep their P&L statements, income statements, balance sheets, and income tax returns proofs available for the last 2 years.

The real estate purchase loan is the most ubiquitous of all commercial office building loans available. They come in both the flavors: Government guaranteed and privately funded. In case of the commercial office building loans in Salem, the financed property itself becomes collateral. The fixed rate commercial mortgage and the adjustable rate commercial mortgage are the two alternatives. The FRM, with its fixed interest rates, gives a much-needed protection in an unpredictable market. ARM, for its adjustable nature, is more susceptible to interest rate changes. The LTV can go as high as 80% and the terms can be anything from 5 years to 20 years, depending on one’s credit appraisal.

With the options available in the commercial office building loans space, bargains and deals are not impossible and with Salem’s charisma growing by the day, it might be too late too soon to start with a commercial office building loan and get a head-start!

Business Loan

What is a guaranteed SBA loan and what are its benefits?

December 4th, 2008

Small Business Administration (SBA) provides guarantees to the lenders to offer loans to small business. Guaranteed SBA loans can be utilized for any purposes, like purchasing machinery and equipment, refinancing, and working capital needs. SBA guarantee is more helpful for the potential borrowers who cannot raise funds from any other sources.

The conventional lender usually does not wish to offer financing to a small business owner who has insufficient collateral. Guaranteed SBA loans therefore help him to obtain financing essential to meet his business needs. The guarantee of SBA works as a substitute for the collateral required by the lender. Since the risk of the lender is considerably reduced, he is ready to offer loans on reasonable terms and conditions.

The main benefit of guaranteed SBA loans is that they involve minimum down payment. Conventional lenders require at least 20 to 30% of the loan amount as down payment, whereas SBA-guaranteed loans require only 10% down payment. The conventional loans do not finance the soft costs of the loan but a guaranteed SBA loan covers the soft costs and thereby reduces the burden of the borrower.

Most of the commercial lenders offer amortization period for 15 years. A lower amortization period can have some significant effect on the business of the borrower. He may find it difficult to make cash flow during sluggish periods. Guaranteed SBA loan has longer amortization period, usually 20 to 25 years.

The main concern of most of the small businesses is cash flow. Long-term financing obtained through Guaranteed SBA loan is the best possible way to generate cash flow. SBA loans generally range from 7 to 25 years depending upon the purpose of loan.

Guaranteed SBA loan involves no balloon payments. The additional expenses for refinancing the loan are eliminated by SBA. The borrower is therefore relieved from the pressure of renewing the loan.

Guaranteed SBA loans have lower monthly payments and flexible terms. There are only limited pre-payment penalties. If the term of the loan is more than 15 years, the borrower has 3-year prepay and he is allowed to pay up to 25% of the balance without incurring prepayment penalty.

For more than 25% of the balance, the prepayment penalty is 5% in the first year, 3% in the second year, and 1% in the final year. The penalty amount is considerably less than that of conventional loans. Hence, the borrower can pay off the loan amount easily.

Since SBA guarantees the loans, the lenders do not require any deposits from borrowers. There is also no need to maintain any additional collateral with the lender. A guaranteed SBA loan has a one-time close. The borrower needs to sign only one set of documents and work with only one lender. This increases the convenience of the borrower and enables him to do single closing. One-time closing also saves him more money.

The guaranteed SBA loan is more suitable for new and small growing businesses. The borrower can enjoy maximum flexibility and he can use the loan fund for wide variety of purposes, like renovation, real estate, payment of prior debts, and so on.

Business Loan

Commercial Storage Building Loans

December 4th, 2008

Why should you be interested in self storage buildings? The answer is plumbing. If you have experience with residential real estate, you know what I mean. There are many headaches related to dealing with tenants. There are neighborhood gangs, prostitution and drugs. How did all of these unsavory people get into your rental property? Well, that is another story.

All that self storage buildings are composed of is walls and a roof. The space is then broken down into multiple units of varying sizes that can be rented for a nominal fee. The renters are usually people that live in the area and sometimes small businesses as well as those who need the extra space to store their junk or their product for a short period of time.

Getting a commercial storage building loan depends on certain factors. The facility should be located on a high traffic street and also have a potential for profitability. So, be prepared. No matter where you go for capital you will need to provide solid documentation that your business concept is sound.

As we talked about previously, self storage properties that are stable and located in a high traffic metropolitan area are desirable. The construction should be concrete block, brick or wood framed. Preference is shown toward single story buildings unless a drive-up access is provided. Metal self storage facilities may be acceptable under certain circumstance. Mezzanine and Bridge loans are available for properties in the lease-up stage or that require substantial rehabilitation.

Commercial storage building loans have various avenues. Fixed rate loans carry an unchanged interest rate for their entire term. They allow you to lock in rates when they are low but you must pay that same rate even if the rate goes down. You can always refinance a fixed rate if the rate changes significantly.

Commercial storage building loans can come with a variable rate. Variable rates offer lower initial rates than fixed rate loans. But, you are subject to fluctuating market conditions. If the rates go down, your rates will be lower; if the rates spike, you will make progressively larger payments.

Many lenders that provide commercial storage building loans start with fixed rates for three to five years, and then switch to variable rates for the remainder of the loan. This type of loan is called a two-step loan. This keeps your payments predictable until you are better equipped to handle the higher payments.

You may apply for an interest only loan to finance your storage building. Interest only simply refers to making payments only towards the interest for the first three to five years. This initially reduces your monthly payments so you can concentrate on improving your cash flow. However, since you are not paying on the principal during this time, your monthly payments will be much larger once the interest-only period ends.

You might also consider a commercial storage building loan with balloon payments. This shorter-term loan, which can range from 5 to 15 years, requires small monthly principal and interest payments. Balloon payments are risky for any business, particularly if you’re applying for a commercial storage building loan for the first time.

If growing you business quickly is important to you, hard money loans or bridge loans might suit you better. There are many avenues to obtaining a commercial storage building loan.

Business Loan