Commercial loans – by which some banks say Yes when they mean ‘No’? In the category Commercial loans Many people are interested in knowledge and learning about many subjects, this knowledge may be vital at some point in your life, attention enough, and dive into more detail more articles and learn more information about Commercial loans – by which some banks say Yes when they mean ‘No’?.
Many banks are so aware of their reputation in the local community who do not want to be known for refusing requests from commercial loans by respected community residents. An alternative that many of these banks have adopted is the art of not to say ‘no’ in situations of commercial finance.
EXAMPLE # 1: conditions more stringent for commercial loans
A traditional bank has decided to drastically reduce the amount of commercial loans that make to restaurants and bars. Instead of ‘officially’ the Elimination of this category of its loan portfolio (they feel would damage its image desired as a full-service commercial lender), have decided to add to its terms more stringent criteria of subscription of commercial loans of such properties. At present, could require three years of tax returns, impose an amount of minimum loan high (to eliminate effectively small restaurants and bars), increase the percentage required for a down payment, the loan limit for 3-7 years (instead of 15-25 years), require a detailed business plan, and impose annual review criteria that allow them to “remember” the loan if the flow of money that is not maintained at a set level. Because the Bank has said ‘yes’ when they mean ‘no’, if an owner of a company accepts the terms of anyway, the borrower ends with the commercial terms of the loan which are detrimental to long-term business health.
EXAMPLE # 2: CASH OUT limited when business loans refinancing
When a company is refinancing its existing commercial mortgage and want to obtain a significant amount of cash for various uses, it is not unusual that the Bank to limit the amount of money in cash the amounts as small as $100,000. While the Bank could make the business loan, if they will not provide the amount of money that is needed by the commercial borrower, this is equivalent to the reduction of the loan. The Bank has said ‘yes’, but a company can have more than one million dollars in equity in your property and only they will have access to $100,000 (is actually a ‘no’ to the business owner who wants to use a significant portion of their equity to expand the business).
Alternative solutions for commercial loans IMPACTED by the circumstances above
There are better options for the commercial loans available elsewhere! Business owners should explore other alternatives of business loan before accepting terms of business loans that put them at a competitive disadvantage. You can find lenders that specialize in commercial and mortgage loans have commercial terms such as the following: (1) stated-income (without tax returns and income verification), (2) long-term loans of 15-25 years (or more) without memory or a balloon provisions or criteria of annual review, (3) business plans is not required, (4) unlimited money out when refinancing, and (5) minimum loan of $100,000.