Tag Archives: commercial
How to apply for commercial loan funding
Clients seeking commercial finance loans need to remember that first impressions count and their initial standard of presentation and communication will indicate to a potential investor whether they have a serious proposal or are just “tyre kickers”, according to Ms Helen Bassett of commercialfundstogo.com
“Too often clients just visit a website, give it a quick glance over then fire off an email to the investment group asking broad questions, or requesting a loan without providing full details,” Ms Bassett said.
“Quite frankly, this is not good enough, particularly when the client is seeking upwards of $50 million for a commercial property project.
“Clients need to keep in mind that potential private investors are already successful business people they understand the commercial market and they have very sound investment judgment.”
Ms Bassett said clients should initially read the web details carefully, download any lending guidelines and read them carefully, then prepare the required information and forward it as requested.
The first step in making a commercial funding request usually requires the client to complete a project profile online and attach an executive summary. There will then be specific submission instructions, which vary according to the type of loan.
She said the main reason for this structured approach was to minimize the decision making process.
Once the initial information is received, it is assessed and matched with a specific private investor, then discussions are held with the client. The next step is to arrange a face-to-face with the investor so the client can present their proposal.
A decision is often made within a few days after this meeting, thus a client can expect to obtain finance in anything from 20 to 90 days of the initial approach, depending on the type of project and finance.
By having the requested information readily available, the client is not only helping to speed up the application process, but is demonstrating to the investor they are serious professionals who are truly committed to their project.
The real benefit of private commercial programs is that they are more flexible than conventional banks and personal or business credit are not primary factors.
It means deals which make sense get done without red tape, last minute hold outs and lender hoops to jump through. Typically, there are no property restrictions and conforming transactions are also highly competitive as investors are eager to fund solid deals.
Facts About the Benefits of SBA 504 Loans for American Small Businesses
The National Association of Development Companies (NADCO) is the trade association for the nation’s 270 Certified Development Companies (CDCs). CDCs are certified by the U.S. Small Business Administration (SBA) to provide financing to small businesses through what is called the SBA 504 loan program. Members are non-profit organizations that serve every state, as well as Puerto Rico and U. S. territories in the South Pacific.
Chris Crawford is the president of NADCO. The organization is based in McLean, Virginia.
NADCO is actively supporting the SBA 504 refinance program, a time-limited opportunity that is due to expire 9/27/12. This powerful program offers businesses the opportunity to refinance their small business loans and withdraw equity for working capital. The program offers lenders the opportunity to bring owner-occupied commercial real-estate portfolio back into regulatory compliance and reduce overall CRE portfolio concentrations.
FINANCING
The 504 industry is responsible for financing more than $45 billion to about 130,000 of America’s small businesses over the past 25 years. The total project amount funded has been over $112 billion in small business financing projects. With NADCO’s support, the 504 program’s loan authority is up from $400 million in 1991 to $7.5 billion in FY 2011.
REFINANCING
Many small business owners are not aware that if they have a commercial business loan (non-SBA loan) they can refinance that loan at very low rates using the 504. For many small businesses, this has meant the difference between success and failure. However, this program is scheduled to end on September 27, 2012.
Small businesses can SAVE money and time using the 504 refinance program. The 504 Refinance program allows small businesses to use excess equity to obtain working capital for eligible business expenses.
The 504 refinance loan program is designed for small businesses that have outstanding commercial real estate and/or commercial real estate loans. Businesses can refinance up to 90% of the appraised value of available collateral.
SBA estimates that as many as 8,000 businesses may participate in this 504 refinancing program during the current fiscal year, which will provide up to $7.5 billion in SBA-guaranteed financing leading to total project financing of almost $17 billion.
The 504 refinance loan program enables small businesses to:
Use excess equity to obtain working capital for eligible business expenses
Lock in long-term, fixed-rate, low-interest commercial financing
Help expand those businesses, create jobs and benefit consumers too
Consolidate existing debt
Finance eligible business expenses, saving working capital
Other benefits include:
consolidate existing debt (balloon and/or high interest rate loans)
lock in long-term, stable financing, reduce fluctuating expenses
finance eligible business expenses, save needed cash-flow
protect jobs and hire additional staff, supporting the local community
include closing costs in the transaction, eliminating cash-flow drain