Tag Archives: commercial loans

How to Find the Right Commercial Real Estate Loans Online

Level 4 Funding explains simple ways to find the right commercial real estate loans… all from your computer. Read on to find out the key ways to choose the right online lender.)

It’s easier than ever to obtain things today. No more running out to the store for clothing, furniture, even groceries can be delivered right to your door! Practically anything you need or want is available at your fingertips and is just a mouse click away! Even when it comes to finding commercial real estate loans, you can turn to the trusty Internet to help you find exactly what you need.

While there are so many options and ways to obtain commercial real estate loans, the process can be started and even finished online. Via the Internet you can do a great deal of research about various loan types, the specialty type that might be best for your business, and even the application process. It can all be done online! However, it’s important to note that oftentimes, these virtual lending outlets may come with a higher interest rate to account for the risk factor. However, getting a loan without leaving your home is just so convenient, that the higher interest rate might just be worth it!

When you are looking for loans online, start at an online marketplace lender. These lenders allow borrowers the opportunity to obtain loans through online platforms. They are also more lenient for those that have less than desirable credit scores, dings on their credit history or who are just starting to establish a credit history for their business. The entire process happens online, so from the sourcing, underwriting, and services to the loan, then through the Internet, your loan is marketed to investors to receive funding. It’s fair to say that most online marketplace lenders are in the realm of short-term loans. However, that’s not to rule out obtaining long-term loans online, its just not as common.

Consider the many benefits of using an online marketplace lender.

Trying to get a loan in pajamas has to be the number one benefit! All kidding aside, the convenience factor is a big plus. However, the online marketplace does offer additional advantages for borrowers. The process is very smooth and efficient. So from the time you apply to the time you get approved (and get cash in hand) is quick and easy! It’s also ideal for high-risk borrowers that have previously been rejected by conventional lenders. Whether or not your loan is approved, there is not a long waiting period in which to find out.

While there are some benefits, there are also some drawbacks when it comes to obtaining commercial real estate loans via the Internet.

It’s important to note that these types of loans may be considered higher risk to lenders. And to ensure they cover their assets, borrowers will generally have to deal with higher interest rates to compensate for lenders’ risk. In addition to higher interest rates, there may be some costs, fees and other monies owned so it’s important to read all the fine print. If you have questions, see if the company has a live chat option or put in a call. You never want to go with a company that is unreachable. There are pros and cons to all things, so as long as you weigh your options and the goods outweigh the bads, finding a loan via the online marketplace can be a win-win solution!

Dennis Dahlberg
Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Reviewing the Types of Alternative Commercial Loans

Why traditional commercial loans might not be right for you… and how to find the perfect loan to achieve business success. Level 4 Funding shows you how.

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There are so many types of loans to consider before you decide which is right for your business needs. For example, a merchant cash advance is an alternative lending program but instead of repaying the loan in monthly installments, loanees pay it back via a percentage of their credit card sales. This is great type of loan for companies that have high credit card business because the rate of how fast the MCA is paid off is related to the volume of sales. The higher the sales, the faster the loan can be repaid — and paid off!

Another form of alternative commercial loans is asset-based lines of credit. With this type, lenders offer lines of credit based on the value of equipment or hard assets of your business. This is a great option for businesses that use a lot of equipment. That would include companies like restaurants, beauty salons, and manufacturing companies. Similar to MCA loans, the value of the equipment determines the amount of the asset-based line of credit (and access to working capital).

Finally, another option is called an unsecured line of credit. For new business, companies that don’t need equipment or ones that don’t have an actual storefront unsecured lines of credit can be great options. This option allows for businesses to obtain working capital. However, in this case the lender may require higher interest rate or payment terms because they are taking on a high-risk investment.

There are many ways that companies can benefits from alternative commercial loans.

For companies that are looking to get cash fast, non-traditional loans are the way to go. They can be approved fairly quickly and traditionally don’t require as much complex documentation required from more conventional lenders. Ultimately, these types of lenders just want to make sure they are going to get their return on investment. If you can prove that to them, a high credit or lengthy established line of credit might not matter as much.

Alternative commercial loans meet a specific purpose, so they might not be the right fit for your business.

For new businesses that don’t yet have a line of credit established or high credit score or ones that don’t have collateral, traditional banks might pass on them as too high risk. However, alternative lenders are more willing to take on these types of businesses. Do your research about the various types of loans available to you and the kind of lenders that can help you. It’s also a good idea to meet with some lenders to discuss your needs until you get a feel for the lender that is right for you. When you are ready, Level 4 Lending is here to help you find the right loan for you — so give them a call today and speak with a professional.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

SBA lowers equity requirements for new commercial loans

Arizona-Home-Loan-Team-Matt-and-Judy-Callahan-300x199As of January 1 the SBA announced it would lower equity requirements for new 7a loans. 7a borrowers will only need to finance 10 percent of future projects to qualify under the program.

The SBA 7a loan is the agency’s most popular lending program. The 7a loan provides 5 million dollars of capital to finance new projects, startups and business expansion. There are few restrictions on 7a proceeds when compared to the SBA 504 loan. 7a proceeds can be used to finance construction costs, business acquisition and can even be used to refinance existing debt. Lowering the equity requirement will help more small businesses finance expansion and acquisition projects over the course of the coming year.

Under the new requirements more borrowers will undoubtedly be able to qualify for an SBA 7a loan and the program is likely to continue to expand at a rapid pace. Even under the previous requirement of 25%,the 7a program has rapidly expanded in recent years. The SBA has backed 3 billion in new loans from the start of the fiscal year beginning last October, an 11% year-over-year increase. in 2017 the SBA backed a record 25.8 3 billion in new 7a loans. the lower requirement will no doubt help the agency break last year’s record for new loans.

Commercial loans related to business acquisition will increase under the new equity requirement, which matches demographic and economic trends.

“We have an aging ownership population. … The baby boomers are starting to reach their retirement years, so we’re seeing a lot of entrepreneurs who started successful companies looking for transition plans,” said Tom Pretty director of SBA lending at TD Bank. Pretty remarked that the lower equity requirement marks a “powerful change” in standard operating procedure at the agency. A recent survey of borrowers at TD Bank revealed a third of small business borrowers sought loans related to business acquisition, expansion and partner buyout. The lower equity requirement will help finance the sale of businesses owned by baby boomers, as this population continues to retire over the coming year.

The lower equity requirement will help boost commercial lending related to business acquisition.

Loans related to business expansion acquisition are considered risky by most banks. These loans usually involve little in the way of collateral on the part of borrowers and therefore most banks are unwilling to underwrite these loans. The lower qualifications under the 7a program will help more borrowers qualify for acquisition loans partially guaranteed by the government. This government guarantee will encourage more banks get involved in financing the deals in the future.

Entrepreneurs looking to finance partner buyouts, expansion plans, business acquisitions and other projects will no doubt turn to the SBA as a vital source of financing.The lower equity requirement means such borrowers will only need to provide ten percent up front in order to qualify under the program. The lower equity requirement will help small businesses receive sufficient capital in order to expand as they see fit.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Defaults on commercial loans related to retail expected to slow this year

4page_img8-bigCommercial loans tied to retail properties will find new strength over the coming year, as retailers find new efficiencies.

The record pace of retail defaults and store closures will likely slow in the coming year. retailers are benefiting from newfound efficiencies and an improving economy. Analysts believe that even struggling to department stores, like Kohls and Macy’s, could see their situation improve in 2018.

Moodys analysts anticipate a better outlook for retail across the board. Moodys predicts that the owners of retail properties could see growth in operating income between 3 1/2 to 4 1/2% over the coming year. 5 out of 14 categories of retailer may even see profits grow higher than 5% in 2018. Moodys claims particularly strong players will include online sellers, dollar stores and home improvement retailers. Warehouse clubs, department stores, office supply stores, auto retailers, apparel sellers and drugstores will continue to struggle.

2017 was particularly dire for brick-and-mortar retailers. Store closures grew by 224% over the course of last year. Retailers planned to shutter a total 6879 locations by the tail end of 2017. 6,163 store closures had already taken place at the end of last November. 2017 broke the record for store closures which was previously set during the depths great recession.

The defaults in retail related commercial loans seen last year seemed to have little to do with the economic situation.

Paradoxically, in spite of record breaking store closures, consumer confidence and retail sales overall reached all-time highs. Store closures last year seemed to have occurred mainly in long brick and mortar retailers unable to adapt to changing consumer shopping habits. The National Retail Federation found in a recent survey that last year’s Christmas shopping season was the first time record for the majority of those surveyed plan to shop online exclusively. 59 percent of consumers surveyed by the group had no plans to do holiday shopping at a mall or department store.

The holders of retail based commercial loans are expected to adapt and defaults are expected to slow as a result.

The record number of defaults last year was likely among retailers who were unable to keep pace with changes in consumer shopping habits. Moodys cites restaurants as a particular example of an industry that has adapted to the needs of consumers. “Consumers are wrestling with higher non-discretionary spending needs while restaurant companies face higher operating costs — predominantly labor — and challenging traffic trends,” said Moodys vice president Bill Fahy. According to Moodys restaurants and other retailers are expected to meet these and other challenges over the course of the coming year. As retailers close more locations, these same retailers will likely find better ways to boost sales at their remaining locations. Moodys expects the wave of defaults to peak by March of this year to 10 1/2%. By this October these defaults are expected to slow with an estimated 4.9% of retail debt in default by that time.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Loans on Special Purpose Properties

4page_img8-bigDepending on the property, it can be difficult to find a commercial loan on those defined as “special purpose.” Here are what traditional lenders look for in these types of properties and why you may need to consider unconventional financing.

A special purpose property is usually built by the investor and constructed for specific, limited uses. These may include car washes, churches, self-storage facilities, gas stations, golf courses, hospitals, dormitories, nursing homes and theaters. It is a property that, once built, will require a large capital investment to convert it to another use. Because of this, most lenders consider this type of property a risky investment.

The Small Business Administration makes loans on these types of properties, but the commercial loan requirements are more stringent than their other loan programs. For instance, they will require at least a 15 to 20 percent down payment as well as credit scores above 680. Their 504-loan program consists of two separate loans—the first one made by a bank or finance company for up to 50 percent of the project cost and the second loan made by a local Community Development Corporation and secured by a 2nd lien on the assets. Though SBA loans often offer the most competitive interest rate and the highest loan-to-value ratios, only prime borrowers are likely to qualify.

Traditional lenders for these types of properties usually fall into the 60 to 75 percent LTV range. So, if the property your considering investing in comes at a cost of $750,000, the bank will offer you anywhere from $450,000 to $562,500, leaving you needing to come up with a down payment that ranges from $187,000 to $300,000. They’ll also require a proven history of your success in managing this type of investment property. If this is a new construction project, expect to pay higher interest rates as this type of commercial loan is considered much riskier than a completed project. There are, however, lenders who specialize in special purpose properties as well as borrowers with limited credit history that need higher loan-to value (LTV) ratios than traditional commercial mortgages can offer.

Hard Money Lenders

Hard money lenders are one of those unconventional commercial loan lenders that investors often turn to when they have difficulty qualifying for a traditional loan or they do not have the time to wait for such a loan to be approved. This occurs when a hot property comes on the market and investors require capital in weeks instead of months. It’s very apparent to those in the CRE world that private money lenders are filling the gap created by tightening commercial underwriting standards. And this is good news for you, the investor.

Private hard money lenders provide funding for all types of CRE investments including special purpose properties, warehouse, industrial, multifamily and office.

At Level 4 Funding, we offer bridge loans, construction loans and loans with specific types of properties in mind. The truth is, because we work with over 200 private investors, there are very few types of projects that we don’t invest in. We offer up to 90 percent LTV with 3 to 60 months interest-only payments. If we sound like the right fit for you, call us for a complimentary no-obligation quote.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

The Benefits and Advantages of Working with Commercial Lenders

timeshare cancellation  15There are many pros to working with professional and experienced commercial lenders. However, every lender has a different specialty so it’s important to understand their expertise before deciding to work with any particular lender.

It’s much easier to work with skilled commercial lenders when its time to obtain a loan. They can benefit you in many ways and assist with specific needs and questions you may have as you go through the process. However, it’s important that you are working with a lender that understands and specializes in your market or niche to make sure that they can best benefit your specific needs.

It’s also a good idea to flesh out your specific needs before meeting with commercial lenders so you can ensure you can properly express your needs. If you are looking to obtain funding via a local credit union or non-traditional lender versus a conventional lending institution like a bank, you’ll want to understand that the processes and requirements will be different. One of the benefits of a credit union is they are fairly stable through economic ups and downs, so they are more likely to lend a higher amount than a bank that has more rigid lending requirements. Credit unions are also more likely to take a chance on a first time borrower, new business or small business.

Another benefit of seeking a loan through credit union commercial lenders is that they typically have lower fees and rates that are more reasonable than conventional banks, hard money lenders or short-term loans. Because credit unions are in a different category than conventional lending institutions, and actually considered non-profit organizations, it is more like using a private lending to obtain funding. This is beneficial to you because they are able to offer better benefits.

Commercial lenders can be the experts you need to help you streamline your approval process.

These professionals are well versed in the application process and they know exactly what is required from the borrower (aka you) in order to ensure eligibility. So it’s very beneficial to utilize a lender in your specific niche to help you get the most “bang for your buck.” Working with a local credit union is also beneficial because these experts understand the market you are in and can help your business based on that knowledge.

How to get the most “bang for your buck” when it comes to your commercial loan.

Doing your research before you meet with lenders is a good idea. Be as prepared are you can prior to meeting with any type of lender by having your documentation in order, being prepared to showcase the collateral you have and prepare a solid business plan that details your intention for your business. Being prepared can be very beneficial in the loan approval process as well. Once you have all your ducks in a row, you may find eligibility to be a lot easier and smoother, especially with the help of the right type of lender for you and your business.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Make Lenders of Commercial Real Estate Loans Want to Approve Your Loan

timeshare resales  3When it comes time to apply for commercial real estate loans, you can appear much more desirable to lenders by having certain characteristics. If you follow this advice, you will have lenders in the palm of your hand — and have the pick of the loan you want!

For the most part, reputable lenders want to work with reputable business owners that are in need of financing. It can be a win-win situation for both parties involved. Especially if you are a business owner that has all their financial ducks in a row, so to speak. You don’t have to have a spotless credit history — though that is a very good start. But there are also some other things that make you desirable in the eyes of lenders.

Being prepared is good advice for pretty much every area of life — and particularly when it comes to commercial real estate loans. You should do your due diligence to make sure you understand what kind of loan you are looking to obtain, you have your financial documentation in order, you have prepared a business plan that outlines your needs, showcases your marketing strategy, and proves to the lender how you intend to make money and are able to pay back the loan.

Being honest is another great trait that lenders find very desirable. While you are not expected to be perfect, it’s important to be authentic. Trying to hide the truth about any past credit or financial discrepancy is bound to come out eventually. It’s best to be upfront and honest from the get-go. Lenders typically understand that not everyone has a squeaky-clean business record. But it’s important to show that you understand you made a mistake, learned from it and will not repeat said mistake again.  

Being proactive when it comes to securing a loan may improve your chances of eligibility for commercial real estate loans.

Another way to be prepared is to put some thought and effort into loan collateral. If you are going to be using collateral as a down payment, be prepared to showcase that. This is an important element of the eligibility of the application, and helps with loan-to-value requirements as well.

The lender for your commercial loans is on your side — and wants a successful application process for a win-win situation.

While it may be intimidating to obtain commercial real estate loans, the real truth is reputable lenders are on your side. They want your application to be successful because it can benefit you both. Level 4 Funding can help walk you through your application whether it’s your first time or you’ve received loans before. Level 4 Funding is dedicated to service and is often much more flexible and lenient in terms than conventional lending institutions such as banks that have to go through a lot of red tape for every application. Call Level 4 Funding today and let them help you with all your loan questions and needs.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
clip_image002clip_image004clip_image006clip_image008
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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

The Best Ways to Secure Commercial Loans

timeshare resales  14It’s not always easy to obtain commercial loans, especially if it’s your first time applying. However, with these tips you can easily and quickly get approved for your commercial loans in no time!

When it comes to securing commercial loans, there is a lot to understand and a lot of different options out there. You may be asking yourself how you can ensure you get approved for the loan you need — when you need it. Securing private money is one way to go about obtaining the funding you need. This is the route to take if you always have the funding you need or you can seek the assistance of a non-bank institution such as a personal investor for the funds you are requesting. Working with an investor can give you the flexibility to create your own terms when it comes to your financial documentation as well as your repayment schedule.

Another option is to seek funding from the seller – i.e. if you are looking to obtain a building or company, the seller of the company has the option to provide you with funding to make the purchase of the building or company, etc. This is another non-traditional bank option that will still requirement documentation of the agreement to protect both parties and also should spell out the repayment schedule for the commercial loans in no uncertain terms.

It’s also important to be aware of some of the risks of securing commercial seller financing. Sometimes an arrangement like this can results in very high interest rates that make paying back and off the loan quite difficult. Before agreeing to this type of loan agreement, it’s crucial to ensure you’re in agreement with the terms and that they are reasonable enough to make it a win-win situation for both parties. When it comes to seeking a private investor, it’s also a good ideas to do all your checks and balances to make sure the investor and you come to agreeable and reasonable terms and that all parties are held accountable for their end of the partnership.
Having your finances in order before seeking out lending options is a good idea.

The more prepared you are prior to searching for financing lenders, the easier time you will have going through the application and approval processes. Prepare your business plan, get your financial documents in order, have your credit score accessible and make sure you are prepared to share any collateral that you may need to put down to secure the loan.

Things to know when selecting to leverage a business line of credit as commercial loans options.

Leveraging a business line of credit is another option to consider when looking to secure financing for your business or company. This is a good way to establish creditability and secure funding. So before you seek a loan, remember that you have lots of options beyond the trying to get approval from a traditional or conventional financial lending outlet.

Dennis Dahlberg
Broker/RI/CEO/MLO
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
clip_image002clip_image004clip_image006clip_image008
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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Understanding the Two Major Types of Commercial Loans

Arizona Home Mortgage Team Matt and Judy CallahanWhen you begin to explore commercial loans, it can appear that there are an unlimited number of options. But you will find that in reality there are two major types, recourse and non-recourse.

There are a myriad of different terms involved in commercial loans, but none should be as important to the borrower as determining if the loan is recourse or non-recourse. In almost every loan on a commercial property, the main collateral for the loan is the property itself. But commercial property value can and does fluctuate much more rapidly than residential property. In some cases a repossessed property is not worth the remaining balance on the loan. For this reason, lenders want to have additional security in the event of a default on the loan. With a recourse loan, the borrower guarantees full repayment of the loan amount due. In a non-recourse loan the lender agrees to settle for the value of the property as full repayment even if the property value is less than the balance due on the loan.

Borrowers should however temper their desire to protect themselves and their personal financial well-being with a non-recourse loan and the extreme flexibility that can be achieved with a recourse loan. As with most things in life, you get what you pay for, and added features and benefits cost more. So the personal financial protection of the non-recourse loan costs you in the form of higher interest rates. That only makes sense as the lender is assuming a greater risk of losing money if you default on the loan. In addition, lenders can also include stipulations about cash flow and maintenance schedules for the property on a non-recourse loan. This is simply another way that the lender is protecting their investment by ensuring that the building, their collateral, is being well maintained to protect the property value.

When to Choose Recourse Commercial Loans

A recourse loan offers borrowers many more options and flexibilities during the course of the loan as well as a lower interest rate. Because of the added security, lenders are more willing to accommodate borrowers. If you want flexibility to customize the loan structure and the payments then recourse is a good choice. You should also select a recourse loan if there is a chance that you will want to restructure after the closing of the loan. If the property that you are purchasing is under construction or is in a distressed condition, you will most likely also need to use a recourse loan as lenders are not willing to extend the greater risk non-recourse loan to a property with questionable value.

Who Should Select Non-Recourse Commercial Loans

If you are planning on keeping the property you are purchasing for the full term of the loan and do not foresee needing to change the loan or its terms for the lifetime of the loan then a non-recourse loan is a good choice. The non-recourse is also important if you are not willing to or able to risk your personal financial well-being on this business property investment. Understanding the main difference in these two types of loans will allow you to select the financial tool which best meets all of your needs.

Broker/RI/CEO/MLO
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
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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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Understanding Commercial Loans and Where to Obtain One

4page_img8-bigThere are several different types of commercial loans available to borrowers. Selecting the best loan to meet your needs and the best lender is very important for the success of your business.

There are several different types of commercial loans available and each one is best suited for different needs. Understanding how these loans differ can help you to make a wise selection about which loan will best meet your current and long term needs. When you are evaluating commercial loans, think of your lender as a service provider and evaluate the product or loan just as you would any other service or product that you would be purchasing. Investing some time to learn about each loan can help to ensure your future success in the business world.

A bridge loan is a short term loan for around a year. This can be used for cash flow, to construct a building before refinancing or even to make a commercial real estate purchase quickly. These loans require very good credit and are normally provided by private lenders. Because the lender is a private entity, there are fewer rules regarding the terms and the processing and fulfillment times are substantially faster than conventional lenders.

Real estate purchase loans are much like fixed rate and adjustable rate loans and are typically only offered to borrowers with exceptional credit of 700 or more. The commercial property must be used as the collateral on the loan and the rate is determined by the loan to value ratio. Hard money loans are a form of loan which comes from a private lender and often has a very fast turnaround time but comes with a high interest rate. The property is also the collateral for these commercial loans. Often times a hard money loan is used as a last resort to try to save a property from foreclosure. Due to the high risk involved, the lenders can justify the very high interest rates and the borrowers are willing to pay them in an effort to save their property from foreclosure.

Determine Your Needs

Before you set out to get a commercial loan, you need to have a well-defined purpose for the funds as well as a financial plan to repay the loan. Having that information will help you to determine which type of loan will best suit your needs at the present and in the future. This information along with your credit history will also help you determine who will be your best candidates for lenders. Conventional lenders such as banks and mortgage companies are the option which would normally be the most cost effective if you have the necessary level of credit rating. If creditworthiness or length of credit history is an issue then a private lender might be your only option. If that is the cast, you should expect a higher than average interest rate. This is the price that you must incur to get a lender to take a greater risk on you as a borrower.

Invest Time First, Then Money

When you are preparing to make an important financial decision such as getting a commercial loan, it is critical to invest your time in research long before you invest your money in loan application fees and appraisals. Take the time to learn about all of your options and then shop for a lender who offers you the best rate and terms to meet your needs.

Broker/RI/CEO/MLO
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
clip_image002clip_image004clip_image006clip_image008
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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage