When is a Commercial Lender not a Commercial Lender?Written by Cameron Brown
A Commercial Lender is Not a Commercial Lender When it is a Bank A commercial lender offers loans backed by hard collateral, usually real estate. Usually a commercial lender's lending criteria will be less stringent than at local bank. This is because most banks focus on providing private residential financing for individuals of local community, not large amount loans for real estate or commercial property acquisition. Most commercial lenders are not so much concerned with borrower's financial record and qualifications as they are about mortgage property value. Unlike most banks, commercial lenders are able to provide a loan in a short amount of time-usually within several weeks depending on mortgage terms. Commercial lenders also offer a wide variety of loan products. Perhaps most popular of these products is bridge loan. Bridge loans are most often used to take advantage of time sensitive real estate opportunities or to avoid foreclosure. A Commercial Lender is Not a Commercial Lender When it is a Commercial Broker Sometimes a commercial broker will pose as a commercial lender. The difference between two is that a commercial lender actually provides money, while a commercial broker provides a convenient way for borrowers to find lenders. In most cases where a broker is used, there is no direct contact between borrower and commercial lender. Indeed, from broker's perspective, this would be a bad thing since they profit considerably from middleman fees charged to borrower. So why are commercial brokers in business? By and large they are much more effective at advertising to potential borrowers than commercial lenders. Commercial brokers also provide infrastructure necessary to carry out loan transactions. However, with more and more business being done over internet, their chief value-add is their knowledge of, and access to, a long list of commercial lenders.
| | Financing a BusinessWritten by Willard Michlin
The financing of a business is a relatively straightforward process, if you are aware of what lenders are looking for and generally what they will and will not do. The will be looking at your credit, your experience and sort of down payment you have and information about what sort of note seller is willing to take back when selling you business.As has been stated, down payment on a business can be anywhere from 25% to 100% of selling price. Lenders will not lend you this down payment money on business itself. You will usually need to get this money from other sources, such as your personal savings, a family member, a retirement plan or other. Your credit should be sorted out well before you start on buying a business. You want to handle any negative reports on your credit fully. You do not want anything that is negative showing up when a lender is checking your qualifications. Negative credit reports make them nervous.
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