Business Finance and Commercial Real Estate Mortgage Loan Choices
Business Finance and Commercial Real Estate Mortgage Loan Choices
Even though longer-term business finance techniques might be appropriate for many circumstances, there are some important short-term business loan options that will be less costly in producing improved credit card processing and commercial mortgage results for business owners. Short-term business financing choices can be misunderstood because of a preference by many business owners for long-term commercial real estate loan and commercial loan programs.
Two Important Short-Term Business Finance Options
Two of the most overlooked short-term working capital business loan strategies are short-term commercial mortgage loan programs and business cash advance programs in conjunction with credit card processing. Both of these business finance options are relevant for most business owners but are frequently misunderstood.
Short-term Programs for Commercial Real Estate Investment Financing
A long-term business loan is appropriate for many businesses that own commercial real estate investment property. Business properties should normally be financed with a combination of short-term and long-term business finance funds. When a longer-term commercial mortgage is viable, it is preferable to secure long-term business financing, preferably for 30 years.
However there will be many commercial mortgage loan situations in which longer-term real estate business financing is not appropriate for the business owner. In such circumstances it is important for a business owner to realize that there are viable short-term working capital management options.
When a Short-Term Commercial Mortgage is Appropriate
If a business owner plans to sell or refinance their business within a few years, it is preferable to explore short-term business finance options. The best short-term business loan will have minimal prepayment penalties in comparison to terms commonly included with long-term commercial real estate investment property financing.
The avoidance of business finance prepayment fees and lockout fees fees in some short-term business financing programs is an important benefit of these short-term commercial mortgage approaches. The absence of these potential fees could produce a savings of up to 20% or more if the business property is sold during the period which would have involved lockout fees in a longer-term commercial loan.
Short-Term Commercial Real Estate Investment Property Financing Limitations
There are some trade-offs that need to be understood if a business owner chooses shorter-term business financing even though prepayment fees will usually be avoided with a short-term business loan. When short-term commercial real estate financing is a realistic option, the loan-to-value will usually be no higher than 70%, the commercial mortgage will not be readily available for special purpose business investment properties such as golf courses and the interest rate will frequently be in the range of about 12%.
Best Investing Possibilities for a Short-Term Commercial Mortgage Loan
Warehouse, multi-family, office, mixed-use and retail business properties are the best possibilities for short-term business financing. Business owners should be comfortable with a time period of less than three years for a typical short-term business loan.
Fewer Mortgage Lenders for a Short-Term Commercial Real Estate Loan
There will typically be a very small number of commercial real estate investment property lenders who are effective at implementing the short-term commercial mortgage loan strategy properly. There are also a number of problems to be avoided with a short-term commercial real estate loan, so choosing an appropriate provider is extremely important to any business owner considering a short-term business finance program.
Credit Card Processing and Business Cash Advance Programs
For any business that accepts credit cards as a method of payment, a business cash advance is a critical working capital management tool that is often overlooked. Even thriving businesses frequently need more working capital than they can borrow. One of the least-known business finance strategies for successful businesses is potentially the single best working capital loan strategy for obtaining needed cash for growing their business: the use of a merchant cash advance or business cash advance program.
Primary possibilities to take advantage of this business financing program are service and retail businesses. This credit card processing and credit card financing strategy uses credit card receivables to determine the amount of a merchant cash advance.
Working Capital Management: Credit Card Financing and Credit Card Processing
This business financing technique is called credit card financing or credit card factoring. Some business owners might have used a business finance technique referred to as receivables factoring to sell future receivables at a discount and receive immediate cash.
Many service and retail businesses cannot document business receivables to obtain a business loan. Businesses such as bars and restaurants do not typically have receivables to use for business financing.
What these businesses do have in many cases is documented sales volume and documented credit card sales activity. It is this documented level of sales volume and credit card sales activity that becomes a financial asset to the business and its business finance strategies. Business cash advances from ,000 to 0,000 can usually be obtained based on a merchant's sales volume and future credit card sales.
A business financing merchant cash advance must usually be paid back in less than 12 months. For business owners that want to renew the working capital cash advance program, it is typically possible to get more working capital after payback of the initial advance.
Limitations and Problems to Avoid with Credit Card Processing and Merchant Cash Advance Programs
As with any successful business finance strategy, there will typically be only a small number of commercial lenders who are effective at implementing this working capital management strategy properly. There are also a number of problems to be avoided with business cash advance programs, so choosing the appropriate provider of this commercial financing service is extremely important to any business owner considering a credit card financing program.
Florida FHA loans, from a Florida FHA lender specializing in FHA Home loan
Florida FHA loans, from a Florida FHA lender specializing in FHA Home loan
FHA mortgage loans, FHA home loans,
FHA is short for Federal Housing Administration. FHA loans were created in 1934 to help stabilize the US economy during the great depression. The FHA mortgage helps Floridians realize the dream of Homing a Florida home. FHA was absorbed into HUD in the 1960s and is now known as FHA/HUD.
There are a great many benefits for those Florida homebuyers seeking an FHA loan that can only be found with an FHA Home loan.. Florida FHA loans are insured by the US government. They provide Florida FHA mortgage lenders with greater security against borrowers defaulting in contract to conventional mortgage programs.. FHA has sets the basic FHA guidelines for FHA mortgage lenders, however FHA approved lenders are able to add on their own specific underwriting requirements. This is why not all FHA lenders are able to offer Florida FHA loans to the same individuals. It is very important that you deal with a strong reputable a company well versed in FHA loans and that knows exactly how to take advantage of all of their great FHA mortgage programs. For the Florida home buyer the FHA program can simplify the purchase of a Florida home, making financing with an FHA loan easier and less expensive than a conventional home loan program. Some highlights of the Florida FHA loan program include:
Minimal Down Payment and Closing costs. Down payment less than 3.5% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs. Easier Credit Qualifying Guidelines such as: No minimum FICO score or credit score requirements. FHA will allow a home purchase 2 year after a Bankruptcy. FHA will allow a home purchase 3 years after a Foreclosure.
Apply for an FHA loan at www.FHAmortgagePrograms.com
Most Florida banks and other Florida lending institutions require a middle score of 640 to qualify for an FHA Home loan. However at FHAmortgageprograms.com we can provide FHA financing to anyone with a middle credit score of 530 or higher. For those with credit scores lower than 530 we will work with you until your credit is sufficient to qualify for an FHA home loan in Florida.
Here are some of the prime benefits of an FHA loan:
Low down payment of 3.5% Very low mortgage insurance coverage only .55% and is (typically 50%-75% lower than conventional Florida mortgage insurance) Co-signers (including non occupant co-signers) are allowed for FHA qualifying medical collections don't need to be paid or small collection accounts FHA has No income limitations at all Ability to use non tradition trade lines to qualify (phone bills, light bill, electric bill, cell phone bill, etc..) No approved zoning requirements FHA loans on Mobile Homes loans are allowed 97.75% refinance is OK or 85% Cash out No reductions to FHA loan amount for declining markets Not credit score driven Resident aliens are allowed No prepayment penalties EVER Security of a 30 year fixed mortgage 6% seller contribution are OK! High debt to income ratios up to 42% and up to 50% with compensating factors Compensating factors such as length of time on the job or funds in reserves help overlook negative factors No reserves required from buyer Gifts are allowed from family, friends, work, or other interested parties Down Payment Assistance Programs allowed
FHA home loan are very popular right now for Florida first time home buyers and people with challenged credit access to low cost secure fixed rate mortgage.
Difficult Church Loan and Business Finance Solutions
Difficult Church Loan and Business Finance Solutions
Church loans often suffer from several problems, and as a result specialized business finance strategies are required. Typical church financing will involve multiple difficulties.
Church loans are probably the most difficult form of commercial financing to successfully close. Churches are an integral part of local communities, so it is necessary to improve church financing solutions. In almost all cases financing will require a very specialized commercial real estate loan that is typically not widely available.
Churches are not typical commercial enterprises but they do have substantial business financing requirements. This article will offer an overview of four key church loan financing difficulties and a listing of six practical church financing strategies.
Four Major Church Financing and Business Finance Difficulties -
Before addressing possible solutions for the most common church loan needs, it is important to discuss the typical barriers to obtaining appropriate financing. Historically church financing has been difficult to arrange for several reasons:
(1) Church Loan Obstacle Number One: Church properties are unique. Lenders are therefore concerned that if commercial loan payments are not made in a timely manner and the lender is required to assume ownership of the property, it will be very difficult to find a new owner because of the unique property features.
(2) Church Financing Difficulty Number Two: Commercial lenders usually require individual guarantors for church financing, and this is inappropriate for a church loan. The financial structure of churches simply does not lend itself to a traditional lender/guarantor approach. Many commercial lenders are not comfortable with the potential lack of individual guarantors because of the difficulty of reselling the church property if negative financial circumstances occur in the future.
It is unfortunately very common for church financing to have been secured only after church members have authorized an individual guarantee for church financing. The need for individual guarantors acts as a serious barrier first because church members might be unwilling to do so and second because there might not be individuals who have enough financial resources to provide an individual guarantee for larger church financing needs.
(3) Church Financing Difficulty Number Three: When church financing is obtained, there are frequently unacceptable business finance terms such as very small loans, low loan-to-value (LTV) of 50% to 60%, short-term loans and high interest rates. These onerous terms are tantamount to the church loan being declined, and if the terms are accepted, the church is likely to experience continuing financial difficulties due to unrealistic commercial mortgage requirements.
(4) Church Financing Difficulty Number Four: Construction, renovation and land acquisition are even more difficult for churches to finance than purchases or refinancing. As a result, needed repairs are often postponed indefinitely and new churches frequently take many years to become a reality.
Six Practical Church Loan and Commercial Mortgage Solutions -
There are common-sense financing solutions for the church loan issues described above. Here is an overview of church financing that is now available from some non-traditional lenders:
(1) Church Loan Financing Approach Number One: Non-Recourse Loans (instead of guarantors). As noted above, the willingness to forego traditional guarantors does require a non-traditional lender. With this church financing approach, church lending will not depend on individual guarantors.
(2) Church Loan Solution Number Two: Long-term business loans. Church financing will be much more successful when it is long-term instead of short-term (payments will be reduced dramatically).
(3) Church Loan Solution Number Three: Low interest rates (usually a maximum of prime plus 1-2%). In reality many churches have been taken advantage of and charged excessive interest rates because lenders perceived that they did not have any other realistic options.
With payments limited to prime plus 1-2% or less, church financing payments will be noticeably reduced. In combination with longer-term loans, the overall payment reduction will make a significant contribution to church cash flow improvements.
(4) Church Loan Solution Number Four: Church loan financing minimum of 0,000. This allows churches to complete most financing in one step rather than piecemeal over a period of years.
(5) Church Loan Solution Number Five: Higher LTV (75%-90% is possible). This results in a more workable amount of 10% to 25% (rather than 40% to 50% with traditional church financing) for the down payment or non-financed portion in refinancing.
(6) Church Loan Solution Number Six: Church financing can now include new construction, renovation, land acquisition, purchase and refinancing. Due to flexible church loan financing, it is not necessary for any of these important church loan activities to be postponed.
Collectively the six church financing solutions described above should benefit a large number of churches by allowing refinancing with much better financial terms and by facilitating the construction of new churches on an accelerated timetable. The six church loan financing approaches should result in financial covenants that will contribute to the long-term financial profile of prudent churches which adhere to the church financing approaches suggested.
Regardless of the practical business finance and commercial mortgage strategies that have been described above, it is appropriate to emphasize that arranging appropriate church financing will almost always be difficult. Due to the specialized nature of a church loan, unavoidable complications with the commercial real estate financing should be anticipated. As a result, prudent church borrowers should attempt to acquire a better understanding of these complex business loan issues.