The Good and Bad of Credit Unions for Texas Commercial Loans

If you’re looking into getting a Texas Commercial Loan from a credit union but uncertain if you would qualify, know that times have changed. All credit unions are not “members only” anymore; in fact, several are open to the public.

slide2There was a time when getting an account and loan from a credit union required association with a certain company or organization. Fortunately, those times have changed. While many still have strict criteria for joining, otherwise known as Field of Membership (FOM) qualifications, others have found a way to allow almost anyone to join. Even those with stricter rules allow family members to enter the sacred circle. Credit unions are not-for-profit institutions that exist to provide their members with banking products and services. Members are also considered owners. Here are just a few of the credit unions that anyone can join: GTE Financial Credit Union, Alliant Credit Union, Connexus Credit Union, and American Heritage Federal Credit Union. Most require a one-time donation to a certain organization. After opening up a bank account, you are then qualified to apply for a Texas Commercial Loans.

Credit unions often offer competitive interest rates and, because members are owners, usually are more personable in their approach. In order to get a Texas Commercial Loan at a credit union, they will need to know your debt-to-income ratio as well as how long you have been at your present job. As with other lending institutions, self-employment can offer some additional challenges. Your credit score and creditworthiness is also taken into account.

According to an article in Forbes, credit unions stepped up to the plate during the Great Recession. When small business lending decreased during 2007 to 2010, credit union lending rose in terms of the percentage of loan to assets. In 1998, legislation went into effect that capped the amount of business loans that credit unions could make to their members. This cap is 12.25 percent of the credit unions’ assets. The National Association of Federally-Insured Credit Unions continues to lobby against what they consider a counterproductive and arbitrary cap.

A Credit Union versus a Private Hard Money Lender

A credit union is considered a traditional lender while a private hard money lender is considered an alternative. They do not fall under the same regulations nor do private hard money lenders require high credit scores and creditworthiness. Their chief concern is the collateral that you are bringing to the table. They also want to know that you have some skin in the game—something to lose should your project or business fall by the wayside. While each hard money lender has their own unique processes and guidelines, most require some of these documents, depending on the type of loan, to be submitted when applying: executed purchase contract, proof of closing funds, an executed purchase contract, budget, business plan and exit strategy.

A private hard money lender offers quick capital without the need for 700 plus credit scores.

At Level 4 Funding, we approve private hard money loans for businesses, homeowners, real estate investors and contractors. If you’ve been turned down by your credit union or bank, give us a call. As long as you have adequate collateral, a good exit strategy and a solid business plan, a private hard money Texas Commercial Loan could be the solution you seek for needed capital.

Dennis Dahlberg
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177 NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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