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If a property has
been owned for less than two years, we must use the
purchase price plus the cost of any improvements made
for determination of the property’s value. |
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A commercial loan involves real
estate, where as a business loan involves non-real estate
collateral. Always clarify. |
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One potential source for a
down payment on a commercial property is through a cash-out
refinance on a residential property. |
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Home > Commercial Bank Loans
A bank will many times decline
a borrower’s loan just before the closing for one
reason or another.
Perhaps the appraisal came in low or the credit score
dropped or the bank just changed its mind. Since banks
typically have limited alternate loan programs, this
could mean that a borrower may have just wasted 30
to 90 days and now he has nothing to show for it.
CONVERSELY, had this borrower brought his loan to
you and you brought it to Financial Resources, there
would be more hope for the deal. We have over 100
different commercial loan programs. Thus if we reach
a roadblock on one program, we have the ability to
change directions and still be able to close the loan. |
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In most cases, a bank loan requires
a borrower to provide an annual income statement and
a balance sheet on the borrower’s business.
The loan terms usually dictate that if the borrower’s
sales, cash reserves, net income, assets, etc, fall
below a certain level than the bank can call the loan
due in full. This is referred to as a “call feature.”
This means that even if the loan has a 20-year term
the bank can require it to be paid in full. Lots of
sleep can be lost with the worry that the bank could
ask for all its money back. At Financial Resources
we do not have any call features on our loans. We
obtain a significant portion of our business from
borrowers in this unfortunate “called loan” situation.
Our loans do not require any type of annual financial
reporting. As long as the borrower is making payments,
we are satisfied. |
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