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Lenders To Avoid - Business Loan And Commercial Mortgage |
By:
Stephen Bush |
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Lenders to Avoid - Business Loan and Commercial Mortgage
by Stephen Bush
One of the most serious business financing scenarios is a lender that causes difficulties for their commercial borrowers on a regular basis. It is specifically this kind of commercial lender which informed commercial borrowers should be prepared to avoid unless realistic alternative commercial mortgage business loan options are totally impractical.
The conclusions in this article are based on a regular pattern of lending abuses observed by advising businesses for an extended period of time. I have encountered numerous business loan situations which have involved commercial lenders that I would not recommend as a result. Based on these experiences and daily conversations with other commercial loan professionals, I strongly believe that there are quite a few business lenders to avoid.
This business loan strategy article will describe the importance of avoiding "problem commercial lenders". The article will not name specific lenders to avoid, but key examples will be provided to illustrate why prudent commercial borrowers should be prepared to avoid a wide variety of existing commercial lenders when seeking viable commercial mortgage and business financing strategies.
Ineffective Pre-approvals for Business Financing
Business borrowers often want an early pre-approval for their business loan. The apparent result of the preliminary business financing approval is that it will allow the borrower to make other business commitments which are dependent on the commercial mortgage being approved.
An ethical business lender will view any business loan approval as a serious and binding action. Borrowers should not expect that a such an approval is routinely possible in a day or two.
Nevertheless there are commercial lenders who provide their own special version of a pre-approval within just a few days of receiving preliminary application information. Because this abbreviated approach to pre-approvals almost always produces unexpected surprises for the commercial borrower as the business loan process goes forward, commercial borrowers need to be extremely wary of any commercial lenders that take this approach.
Why do some commercial lenders provide such meaningless pre-approvals for a commercial mortgage? There are two likely reasons. (1) To motivate the commercial borrower to stop considering other potential commercial lenders. (2) To provide a business loan pre-approval that is similar to a structure prevalent with residential loans.
Since many commercial mortgage loans are arranged by residential mortgage brokers who are frequently unfamiliar with common business loan procedures, this reason will be especially applicable when dealing with commercial lenders that specialize in dealing with residential mortgage brokers. This type of commercial lender should be avoided at all costs for most business financing situations.
Yes or No for a Commercial Mortgage Business Loan?
I published an earlier article which reported the questionable technique of many local and regional banks to say "yes" when they mean "no". When this happens, a bank will attach non-competitive commercial mortgage terms to business loans instead of refusing the loan. Business borrowers should explore other business financing options instead of accepting such unacceptable commercial loan terms.
Thinking Outside the Bank for Business Financing
In some non-competitive business markets, it is unfortunately common for a lender to employ business loan terms that would typically not be seen in a more competitive commercial loan environment. Such business lenders can repeatedly take advantage of a non-competitive commercial lending imbalance.
It is not necessary for borrowers to use only local banks for business loan needs. A wise strategy for business borrowers is to actively consider non-bank commercial mortgage alternatives.
Commercial Property Commercial Loan Appraisals
For a commercial loan involving commercial real estate, commercial appraisals are a necessary part of the business financing underwriting. A commercial appraisal is usually costly and time-consuming. Eliminating business lenders which have known problems with commercial appraisals will help business borrowers to avoid frustrations as well as save money and time.
Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.
About Stephen Bush: Steve provides candid business loan and church loan advice. Free Working Capital - Commercial Loan reports from AEX Commercial Financing You are welcome to reprint this article - but get your own unique content version here.
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Article Source: http://www.statssheet.com/articles/article54809.html |
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