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A business loan to buy a business involving either golf courses or funeral homes is among the most difficult commercial mortgage scenarios. Golf course financing and funeral home financing involve special complexities not found in typical business financing situations. In both cases refinancing is usually even more difficult than the commercial loan to purchase. Fewer Business Lenders - Funeral Home and Golf Course Financing To further compound the already difficult business financing for either a funeral home or golf course, fewer commercial lenders are providing competitive commercial mortgage business loan terms. There has especially been a significant reduction in the number of local and regional banks providing commercial loan programs for both funeral home loans and golf course loans. Buy a Business - Business Opportunity Financing Business financing to buy a business opportunity is a special business loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find. Avoiding Problematic Commercial Mortgage Terms Some regional and local banks will probably offer short-term business financing instead of a long-term business loan for golf course financing and funeral home financing. Another key term that can vary significantly is the percentage of value for the business financing. When buying or refinancing a funeral home or golf course business, it is of critical importance to avoid undesirable commercial loan terms, especially commercial mortgage conditions involving length of loan and percentage of value. Stated Income Business Loan Problems There are at least two critical problems in using a stated income business loan for either golf course financing or funeral home financing. The first major drawback of a stated income commercial loan is the maximum commercial mortgage loan that can be obtained. The second major drawback is the low percentage of value for stated income business financing. As a result of these significant restrictions, the use of a stated income commercial real estate loan is not recommended for a funeral home loan or golf course loan. Business Value and Commercial Real Estate Value for a Business Loan Another complicating factor for funeral home financing and golf course financing is that the business value frequently exceeds the commercial real estate value by a significant amount. This is especially true when appraising a funeral home. Some commercial lenders will provide a commercial mortgage that includes only the commercial property value, and this will result in a much smaller commercial loan. Exorbitant Commercial Loan Fees for Funeral Home and Golf Course Financing Commercial borrowers should expect some legitimate and reasonable commercial mortgage fees during the initial commercial loan process. There are several commercial lenders that continue to take advantage of the severe lack of business loan choices for purchasing, building and refinancing a golf course or funeral home. One of the particularly unacceptable tactics is to charge exorbitant fees ($25,000 is not unusual) whether or not the business financing is successfully completed. Funeral Home Financing and Golf Course Financing - Avoid Problem Lenders As already noted, the availability of suitable lenders for this specialized type of business loan is shrinking. A viable commercial mortgage for funeral home financing or golf course financing will depend upon a prudent choice involving the lender. It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier. A borrower seeking to buy a business should be prepared in advance for the limited number of acceptable business financing lenders for golf course financing and funeral home financing. Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.
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