Believe it or not, there are several options for starting or expanding a business outside of applying for commercial loans. And that’s music to the ears of many entrepreneurs and CEOs. Commercial loans have been taking a hit as of late. Here’s what you need to know.
Commercial Property Loans Forecast Bleak
Recent news from Reuters doesn't paint a flattering picture for commercial loans in 2009. A perfect storm of lack of credit, falling property values and reduced cash flow is making acquisition and repayment of these financing vehicles difficult at best. What’s more, faltering values will continue to pressure businesses who can’t mean loan-to-value ratios on loan apps.
If You Have Equity--Use It
For those who have commercial property already, using the existing equity in the property just might be a way to fund growth. According to Jeff Rauth, President of Commercial Finance Advisors, Inc., those who are looking to pull cash out of an existing mortgage can go the equity route without such bothers as appraisal, title, or environmental fees.
Getting Ready to Apply
For some business owners, commercial loans will be their only option. If that’s the case, Vendorseek offers a comprehensive list of pointers to keep in mind before you apply. Strategies such as applying to several lenders, keeping accurate balance sheets on hand, and consulting the Small Business Administration (SBA) can significantly improve your chances of uncovering a loan with terms you can live with.
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