Home | Business | Trade
Because investors are increasingly considering business opportunities and commercial property, it is important to their success that they receive a comprehensive introduction to the distinctions between residential real estate financing and commercial real estate - business opportunity investing. This business loan discussion will inform new business real estate investors about critical business financing factors. Refinancing an SBA Loan and Business Opportunity Loan Refinancing a commercial mortgage or business opportunity loan will almost always be more difficult and complex than the initial business loan or commercial real estate financing. This is especially true when refinancing an SBA loan. It is prudent to be aware of these refinancing difficulties at the time of the initial business finance loan. Business Finance Loan and Real Estate Mortgage Problems In comparison to residential real estate financing, business financing has many more potential problems. This increases both the time and complexity of virtually all business loan and commercial mortgage transactions. It is especially important to avoid certain business finance difficulties that tend to recur on a regular basis. Commercial Mortgage and Business Opportunity Experience The obvious oversupply of inexperienced business opportunity financing and commercial real estate financing advisors and lenders must be a practical factor to anticipate, and a lack of meaningful experience can seriously complicate the loan process. This is due primarily to the negative residential real estate finance environment. Most residential mortgage brokers are trying to replace residential loan revenues with business loan transactions, but in most cases they are acting as business finance advisors without necessary commercial loan qualifications. Time to Finalize a Business Opportunity Loan or Commercial Mortgage Regional and local banks will frequently have an extensive business loan process that can consume nine months or more. Non-traditional business finance requirements can be completed more efficiently than with a traditional commercial lender but the process will still be several longer than a typical residential real estate loan. The use of SBA loan and specialized commercial mortgage programs can increase the complexity and time frame for completion of business financing. Expected Business Loan and Business Opportunity Financing Fees A more expensive fee structure is likely for business financing and business opportunity financing because it is more time-consuming and extensive than residential real estate finance requirements. The use of commercial real estate loan retainer fees are more common than with residential mortgage financing. The business loan process routinely includes third-party fees that contribute to costs such as environmental and appraisal fees. Special Purpose Commercial Real Estate Finance Special purpose commercial real estate finance situations involving funeral homes, golf courses, churches, gas stations and similar specialized properties result in complexities not seen with residential mortgage financing. Such specialized commercial properties are increasingly excluded from the business loan portfolios of many commercial lenders. Because of limited lending options combined with unique commercial mortgage issues, golf course financing, church financing and funeral home financing are among the most difficult scenarios for business financing. More Key Real Estate Mortgage Factors The commercial mortgage and business loan process in the United States has many factors distinguishing it from residential real estate financing. Many significant topics not described in this discussion are explained in several other business finance reports. Some of the topics covered in separate reports are personal guarantor requirements, lender suitability criteria, business opportunity finance and SBA loan financing. Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.
Article Source: http://www.rightarticle.com
Contact Stephen Bush at AEX Business Opportunity - Business Financing Programs for business loan and commercial mortgage strategies
Please Rate this Article
5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
