What You Need to Know About Working Capital Commercial Real Estate Financing

3page_img2-bigIf you need cash fast to get through a rough spot in your business or to catapult your business to the next level, you may benefit from working capital commercial real estate financing. Before applying for this type of loan, find out the benefits, and drawbacks, of this loan so you can up your chances of being eligible to receive funding.

When you need a loan, you may hear the term “working capital.” While it sounds formal, it’s really just a term that means the cash that a lender can loan to a borrower. This working capital can be used for important company needs for continued business operations such as employee payroll, monthly utilities, paying invoices and rent. There is always the chance of a company getting tight on funds and in that instance, working capital commercial real estate financing can be very helpful. A loan like this can make sure you keep your business running through tight times, even if you are low on cash flow and don’t have the ability to liquefy any assets.

Working capital loans have multiple benefits. They usually don’t require a lengthy or complication application process or approval time. The application process is not as strict as conventional loan processes sometimes can be, so this speeds up the process as well. Also, once a business is approved for the finances, funding can be received very quickly. Usually, once approved, funds are available to the borrower within seven working days. Another benefit is that the company is not required to use the funds for a specified purpose, unlike conventional bank loans that sometime have restrictions on how borrowers can use the working capital funds. Finally, companies that have less than perfect credit scores or history are still eligible for this type of financing.

Along with the benefits of working capital commercial real estate financing, there are some downsides. Though credit report review and application approval may be a bit ore lenient than a conventional application process, you may be responsible for more collateral to secure the funding. These loans also have shorter terms, which usually equates to higher interest rates than traditional long-term loans that have longer repayment schedules.

If your business represents a niche market, you may find that working capital commercial real estate financing is the right loan for your company.

Even if your business is a bit “out of the box” for traditional lenders to approve your loan, with certain loans that don’t require the loan money to be used in a specific way, this is ideal for new companies and small businesses in need of cash. This financing can be very helpful for companies that need to purchase inventory, supplies, equipment or other business needs. But beyond that, even if the company does need to use the funding for other purposes, it’s not an issue.

When you are in need of working capital, find a lender that specializes in this type of loan.

There are many lenders that focus on this type of loan, and know how to help companies like yours get the loan approval you need. Do your homework prior to meeting with a lender to ensure they can help you get the kind of working capital loan you need to help your business grow and succeed.


Dennis Dahlberg
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com 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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