Business Loans Without Banks - 14 Reasons Not to Go to a Bank for a Commercial Mortgage ~ Credit Master

Traditional banks play an vital function for their role in the U.S. economy. But when you need the commercial loan there's more than the dozen factors to think about an alternative to an established bank to obtain business loans. For the majority of small entrepreneurs at least five of these could be relevant. For many business loan borrowers, banks may have rejected their loan applications. The reason for this particular compelling reason to seek out a different source than the traditional bank (being denied by traditional banks) is not listed in the following list.

There are 14 good reasons why a business owner should not look to a traditional financial institution for a commercial real-estate loan.

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Reason #1:Minimum commercial real estate loan amount for banks that are a majority is $250,000 or greater. For business lenders that are not banks the minimal commercial amount for a loan is $100,000.

Reason 2: Most banks charge an upfront commitment fee. Many non-bank business lending institutions don't charge an upfront commitment fee for commercial mortgages.

Reason #3:Most banks will severely restrict how much cash a borrower is able to receive when refinancing commercial mortgages. If a borrower wants to refinance their business's property through businesses that do not have bank loans, they may typically obtain as much as $1,000,000 cash.

Reason #4:Most banks are reducing their commercial real estate loan rates in places like bars/restaurants as well as auto service companies and funeral homes. Business lenders that are not banks are interested in these categories of businesses (and numerous other special purpose properties) for commercial mortgages.

5 ReasonsMost banks require business plans when they apply for commercial mortgages. The cost of providing these plans is typically several thousand dollars. Businesses that are not bank-owned generally don't need documents for business as part the underwriting process for commercial real property loan.

Reason #6:Most banks will require tax returns to fund commercial mortgage. Business lenders that are not banks do not require tax returns , or income verification in order to obtain the Stated Income commercial real mortgage. A majority of banks that do not require tax returns require clients to fill out IRS Form 4506 (which allows the lender to request the tax return directly from IRS). Business lenders that are not banks typically don't require clients to sign this form.

Reason #7:Most banks will require the cross collateralization of personal property in order to get commercial real estate loans. The majority of non-bank business lenders don't require cross collateralization of personal assets in order to obtain commercial mortgages.

Reason #8:Most banks will require balloon payments, or the loan could be recalled for as little as 3 to 5 years for commercial mortgages. If you have a commercial real-estate loan from traditional business lenders that are not banks and all properties are qualified for loans with a 25-year term and some loans up forty years.

Reason #9:Most banks will not allow seller second or secondary financing in commercial real estate loans. With a lot of non-bank business lending when a business borrower makes use of a seller's second or another secondary financing to finance commercial mortgages the borrower of the business can get a loan with the CLTV that is up 95 percent of property's value.

Reason #10:Most banks require income verification or audits, even following the time the real estate commercial loan is closed. Non-bank business lenders don't check income before or after a commercial loan has closed through the state-sponsored business loan program.

Reason 11:Most banks have strict guidelines regarding "sourcing" and "seasoning" of their assets or ownership to be able to get commercial mortgage. Many non-bank business lending institutions don't have any restrictions or restrictions regarding sourcing/seasoning the funds or seasonalizing ownership.

Reason 12.Very very few commercial banks provide an assumable real mortgage. The majority of non-bank business lenders offer an assumable Commercial Loan Program, which covers loans up to $1 million.

Reason 13.With the majority of banks an average commercial real estate mortgage will require between 3 and 9 months to be closed. In the case of typical non-bank business lending the majority of commercial mortgages close within 45-55 days.

The reason is 14Very only a few banks utilize Stated income (no tax returns and no Income verification) for commercial real estate loans. Business lenders that are not banks use the Stated Income approach for commercial mortgage loans under their Business Loans with Stated Income Programs (most commercial loans with a value up to $2-3 million can be financed through this type of program). This is especially beneficial for those who are self-employed and have income that fluctuates and difficult to properly document.

Stephen Bush is the Founder and Chief Executive Officer of AEX Commercial Financing Group, LLC ( https://commerciallendingusa.com/ ). Steve provides commercial financing assistance throughout the United States and is the publisher of The Commercial Mortgage Loans Guide ( [https://commerciallendingusa.com/] ) and The Credit Card Receivables Guide ( [https://commerciallendingusa.com/] ). Information about registering for a no-cost online seven-part commercial Mortgage Course or to sign up for the free online 6-part set of Special Commercial Financing Reports is accessible at every AEX Commercial Financing Group, LLC websites.

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