Making Your Business Happen
with a Commercial Lender |
By Cameron Brown |
|
If your home business is starting to overflow from the office into
other parts of the house, it may be time to consider finding a
building large enough to handle your startups rapid growth.
However, most businesses are unable to generate enough revenue
at this phase of growth to allow for the outright purchase of a
new facility. In fact, businesses of all sizes commonly go
through a commercial lender when acquiring new real estate.
There are literally hundreds of commercial lenders waiting to
provide new businesses with growth capital. You are probably
seen their advertisements pop up on your browser offering the
lowest rates and best service. With so many lenders to choose
from, how can you get past the gimmicks to find the one that
will fill your needs?
Lets start with the type of
business you want to open. Are you thinking of a manufacturing,
retail, agricultural, or service business? There are many
different types of business, all with their own unique facility
requirements. However, not every commercial lender will finance
every property type. Here is a brief list of the different types
of property that a lender may (or may not) finance:
Agricultural (Ranches, Farms)
Automotive (Gas Stations, Car
Washes)
Hospitality (Hotels, Motels)
Industrial
(Heavy/Light Manufacturing)
Leisure (Golf Course, Amusement
Parks)
Mobile Home Parks
Office Buildings/Complexes
Parking Lots
Retail (Shopping Centers, Strip Malls)
Tenant Buildings (Apartments, etc.)
Besides finding a
commercial lender who will finance the type of property best
suited for your business needs, you also need to consider what
kind of loan options will be best for you. Some lenders are
fairly flexible in their loan offerings; non-recourse,
mezzanine, and bridge loans may all be useful options depending
on your individual requirements and circumstances. In addition,
many commercial lenders also provide construction financing for
borrowers who would prefer a custom facility. Renovation and
repair financing is also a common offering by many lenders.
Before you borrow from any commercial lender, first make sure
that your anticipated loan amount falls comfortably within the
dollar range that the lender is willing to provide. Most lenders
have a minimum loan amount of 100k to 300k although you will
find the occasional institution willing to make loans as low as
25k. While the majority of lenders have a loan ceiling reaching
$10 million, a few of the largest have no limit.
Some
commercial lenders also provide opportunities to refinance
property that you are previously purchased. While the a .5%
decrease in interest may not seem like a big deal on a $25,000
loan, it can save you a substantial amount of money on your $50
million loan. A flexible lender may even give you the option of
borrowing to avoid foreclosure. While this should always be the
option of last resort, it may buy you enough time to make your
business profitable enough to survive a sudden cash flow crisis.
Whether you plan to purchase an apartment complex, industrial
facility, or retail outlet, there are few people you'll work
more closely with than your commercial lender. When it comes to
starting or expanding a business, make sure that your lender is
as vitally concerned with your success as you are. After all,
they want a return on their investment. It's important to find a
commercial lender who is small enough to give you the personal
attention you will need, but large enough to support your
largest commercial real estate acquisitions while giving you
options and interest rates that will allow your business to take
off. |
|
|
|
|
|
