Top 5 Requirements to Apply for a Commercial

A commercial loan is a type of loan given from a financial institution to businesses to support a garden variety of operational, manufacturing, payroll, and similar costs. Since, funding options such as a bond, equity, and others require a lot of documentation, regulatory hurdles, and steep upfront payments, most SMEs and startups look at commercial loans as a hassle-free choice

If you are applying for a commercial loan in Dallas, Texas for your startup or small business, read on to find out the 5 top requirements you’d need to fulfill to be able to secure the loan.

1.      Your Credit Worthiness

First and foremost, your credit score will be your biggest advocate. If you have got a good and healthy credit score, any lender will be more than happy to move on to the next steps to help you secure a loan. Keep in mind though, that lenders will not only look at your credit score but your business’ as well.

So, keep both scores in order when you are applying for a commercial loan.

2.      Revenue & Profits

As a standard practice to acquire a commercial loan, you’d need to show your annual revenue reports and profit and loss statements to apply for the loan. Lenders review these documents to gauge a business’ ability to repay the loan. These documents help set up the terms of the loan, the timelines, and may help the lender see your future receivables as a form of collateral.

3.      Collateral

When applying for the commercial loan in Dallas, Texas, you need to show the proof of collateral that you’re putting up for the loan. Different things can be used as collateral to secure the loan for your company. A real estate property, business equipment, inventory, vehicles, and anything else that has monetary value that the lender will be able to sell if you default on the loan can be considered collateral.

As mentioned in the point above, account receivables – especially when substantial – are an attractive collateral option.

4.      Use of Loan

Not all, but most lenders require potential borrowers to outline where the loan amount will be utilized. Most commercial loan types are there to improve a certain sector of the economy. For example, there are agriculture loans that you cannot use to support your fashion retail business. Therefore, be open and clear about what you intend to do with the loan amount and where you want to utilize it. Some lenders are not strict about these conditions, though. So, do your research well and ask important questions.

5.      Business Plan

What always goes in favor of a borrower is a solid business plan. If you are launching your startup and want a commercial loan to cover operational costs for the first few months, a detailed and well-executed business plan will help a potential lender see your loan request more favorably. For those who have been in the business for some time, a similarly well-done loan proposal might do the trick.

Always keep your business plan/loan proposal, specific, concise, and comprehensive. The more answers it has, the fewer questions your lenders will have in their minds.

Concluding

Applying for government grants and other funding options can be time-consuming and too much for a new business. For business expenses that are time-sensitive such as payroll or fulfilling a large manufacturing order, commercial loans work as the best lending product. They are flexible, easier-to-get, and completely secure.

TOP TIPS THAT CAN HELP TO FIND THE BEST HARD MONEY LENDERS

Most of the people find it too tough to get their loans approved by the traditional lenders like banks and other lending companies and turn to hard money lenders for quick and easy processing. The best thing about hard money loans is that they can be secured in the minimum time with flexible terms and conditions that make it easy for both the parties to achieve their goals. However, it is important to find the best hard money lenders Houston where the borrower is completely at ease and knows that the lender will not only offer money but also support in time of need.

There are many ways to find the right hard money lenders but it is important to work with lender whom you can trust and develop a relationship.  Seek advice from people who are either already working with a lender or have worked with one in the past to get the best information. It is also essential to meet at least two to three lenders to decide which one suits your project and needs most.

Discussed here are some top tips that would help to make the process of finding the best hard money lender easy and determine which lender would be the best choice for borrowing money:

Lender’s reputation

It is very important to consider the lender’s reputation; with the popularity of hard money loans, there are so many people in the market that claim to offer loans but not all of them are thorough professionals and deal with borrowers in the most trusted manner. It is best to work with a lender who has been around in the market for some time and is known for ethical and clean dealings with the clients. It is a key aspect to consider because you don’t want to end up working with someone who is wanted by the law or is known for shady dealings and contacts. Check out the lender’s reputation and market standing before going ahead with the contract.

Repayment schedules

The repayment schedules should be discussed before the contract is signed and you get the money to finance your project. In addition to this, you should discuss all scenarios with the lender in case something goes wrong or things do not go as planned. In most of the cases, hard money loans are for 12 to 36 months and many lenders do not have prepayment penalties for early repayment. Talking about repayment schedules and penalties will give you an idea about the lender and if you are working with someone who is professional and considerate enough to help you in time of need.

Interest rate

It is important to know hard money lenders charge premium interest rates for short term loans while longer term money products offer lower rates. You must work out which loan would suit you most and if you will be able to repay it as per the terms and conditions in the contract. Make sure the lender outlines all the details clearly and does not hide anything as it might land you in trouble when you do not have the money to repay. Have a detailed discussion with the lender regarding the interest rate as well as fees so that you do not face any problem later on.

Swiftness of loans

Hard money lenders are popular because they approve loans swiftly and the borrower can receive the finances in just 10 to 15 days, allowing both short and long term lenders to close their deals without any trouble.  It is important to note how quickly the lender is able to offer capital and what type of customer service you get so that you do not face any problem in case of any emergency. The main reason behind it is that hard money lenders do not require lengthy paperwork or protocol as compared to banks and other credit companies; they focus on the collateral and your ability to repay.

Finding the best hard money lenders Houston can become easy if you keep your eyes and ears open and see which one offers the best service and financing conditions.

HOW CAN A HARD MONEY LOAN SAVE YOUR BUSINESS?

Most people take hard money loan in literal terms, believing that it is something hard to seek and very tough to afford. On the contrary, hard money loans are way easier to obtain than conventional loans due to their flexible terms and conditions and means of access.  Hard money loans are mainly used for commercial properties and anyone looking to establish or save real estate business can seek hard money loans without facing long waiting time and unnecessary paperwork.

It is important to realize that loan business is risky, whether you get it from a friend or a bank. You do not know if you will be able to make enough profit and return the loan the right way but with proper planning, evaluation of market trends and hard work, you can look forward to desired outcomes.

However, securing a loan is not easy especially when you approach a bank or a lending company. Banks and lending companies have a long list of things that they check when considering your loan application; from income details to credit history and existing debts to the potential of the deal, they check everything carefully and if there is even a little doubt, they reject the application as they want to secure their money.  This often creates a lot of trouble for people who are serious investors and seek loans to save or grow their business and less income, lack of good credit history, long waiting time or rejection jeopardizes their deals.

On the other hand, hard money loans are easy to secure as the lender does not focus on these issues as banks. They are mainly used for commercial properties when things are serious and you can secure a hard money loan to save your business and turn your dream of becoming a real estate investor come true. All you need to do is search home or commercial property loans when you need them.

Hard money loans are not necessarily based on credit; the collateral that would be used for this type of loans is the property that you intend to purchase. It is necessary to know that these loans are funded by investors and not banks. The biggest difference between banks and investors is that investors already have in mind the amount of money that they need to make that would ensure a worthwhile deal. While banks make money too but hard money lenders get a higher percentage of profit as they are taking a bigger risk and provide help to business owners at a time when no one else is willing to trust them.

If you are looking forward to purchasing a property, turning it over and selling it for profit, hard money loan is the right option. Unlike home loans, the hard money loans rely on the potential sales price of a commercial estate property. The potential investor that is considering lending you the money will not focus on the appraised value of the property. Rather, he will look at what future sale price will be if this property is sold shortly after the loan is approved. Depending on the condition of the property, this loan will be typically between 50 and 75% of the appraised value of the commercial property and help to save the business if you do not have any other option.

An important thing that you need to know for seeking hard money loan is that you must know if you can turn the situation around in a few months. You must have a solid plan of success that will turn around the business in a short period as the investors want the money back, either when you return the money or when you fail to pay back and they take over the property and sell it.

You can look forward to saving your business and enjoy the benefits of hard money loans Houston by finding the right lender who is ready to make a profit from investing in your project. Before proceeding further or signing any paperwork, it is best to search thoroughly and look for the best deal, that is logically and strategically the best choice for business. 

What to do if you are thinking of applying for a real estate investor loan

Are you thinking about applying for a real estate investor loan and want to make some good money with the purchase of a real estate investment property or properties, you will have to move carefully to ensure you get what you are looking for. When it comes to securing a real estate investor loan, there are a lot of things that you need to do and a number of steps you must take right to ensure the loan application is approved.  Following the steps right and keeping in mind what it is all about and how it works will help to increase your chances of getting approved for a loan, instead of rejection and distress.

If you are looking forward to becoming in investor and but are unable to do so due to lack of capital and funding, there is no need to let your dream remain a dream as real estate investor loans offer the best way out. You can apply for loans with real estate investor loansSan Antonio and look forward to entering the real estate market with increased chances of success.

This article discusses what to do if you are thinking of applying for a real estate loan and how you should proceed to ensure you get a loan at the best term with the best lender.

The first and the foremost thing to do before even applying for a real estate investor loan is to request a copy of your credit report. In order to get a real estate investor loan without any trouble, you must be able to present a good credit score as lenders want to know who is borrowing their money and if you are serious and sincere about returning it. Getting a credit history report will ensure that you do not get into any problem later on or face outright rejection.

If your credit history is not very good, there is no need to worry as you can take some time to work on it and repair the problem so that you do not face reject when applying for a loan. The better credit history you have, the sooner you can apply for a loan and move forward with your plans.

 In addition to this, before applying for a loan, it is important to develop a sound and feasible business plan.  It is necessary because financial lenders want to know exactly what you will be doing with their money and how you will spend it and how you would repay it in the long run. Some financial lenders even want to see the information or details regarding the real estate properties you are interested in buying to check out the prospects before making any decision. However, as many investors target foreclosures that move really quickly, getting detailed property information is not always required.   This does not mean that you should not focus on this aspect; you must have a business plan ready that outlines your intentions, what you plan to do with the property and how you plan to return the money to the lenders. A business plan will make you look more professional, prepared and responsible, increasing your chances of securing the loan.

Focusing on where you can get a real estate investor loan from is also important. Many potential investors turn to local banks or credit unions to seek loans while others prefer to deal with online lenders. The decision is yours but you must explore all avenues before moving forward. The right thing to do would be to send out multiple loan applications as they will not only increase your chances of getting an approval but you will also get to know which lenders are offering the best deal. Keep a track of where you have applied and what they are offering and you will be able to determine from where you are getting the best repayment terms.

Real estate investor loans are a great option for those who have the insight and the vision to make the best decisions and reap good profits from the investment property. With the right tips, you can look forward securing the required funding the smarter way and become a party of the investment market.

TOP TIPS FOR FINDING THE BEST PRIVATE MORTGAGE LENDERS

In the real estate industry, a private lender is a much-valued asset who can provide a much needed relief at this time. It is important to understand that buying an investment property is different than purchasing a primary residence. While many homeowners will turn to a conventional mortgage, real estate investors often look for alternative forms of financing and in order to do things right, they must know how to use private mortgage lenders to fund their projects and achieve their desired goals.

At the same time, it is also important for you to understand what these lenders can do for you as an investor and what exactly do they do.  Also, how to approach the lenders about a given deal is crucial to ensure you work with someone who is ready to use their capital to finance your investment and profits from the interest you will pay on the loan. Private mortgage lenders are not affiliated with a bank or some financial institute and deal directly with the borrower. To make their real estate project work, borrowers can approach private lending companies or individuals to turn their dream of becoming an investor a reality.

Private lenders work best for potential investors because they often have different approval requirements and a faster pace than traditional financing options. While the qualifications and interest rates will vary based on the situation, the process of working with private lenders is almost similar to other loans.   Read the top tips to learn how to work with and find private lenders so that you can ensure the best financing for your next deal with ease.

How to find private lenders for real estate

Learn what private mortgage loans are all about Knowing what private mortgage loans are all about is very important before you take a step forward. Unless you know what you want and how the loan can be used, you will not be able to work things out and apply for it the right way.

The good thing about private money lenders is that you can use them for either refinancing a property or for buying a new property. They can help you with almost any aspect of investing in real estate; while the right financing will vary on a deal to deal basis, knowing where you can get help from and how can make a big difference.

Prepare a strong portfolio to present to the lender

Even if these loans can be secured easily, the lender would still want to know what you plan to do and how you will be paying back the loan. Having a strong portfolio is very important in this regard and you must find out all the crucial information about the property you are interested in investing and what is the potential for profit. Make sure to prepare an impressive portfolio that makes getting the right funding most convenient for you.

The portfolio should include a company overview, which covers your education, goals, past deals and experience, and what makes you the right investor for their funds. Along with this, you can also prepare a presentation or video outlining any previous properties that you have worked with and discuss the success of past deals, including pictures, numbers, and relevant information. The best way to do it is to select the properties that show your best work and highlights your strengths to make a good impression.

Identify the right lenders

Identifying the right lender is very important because you do not want to work with someone who is either not professional or fails to adhere to code of conduct and ethics in business. You can ask around people who have already sought private mortgages or ask property agents and they might be able to recommend a few names. It is necessary to find the right lender for the project so that you get the required capital on the terms and conditions that help you move forward with plans without any hindrances.

Impress the lenders with your pitch

Impressing the lender with your pitch is most important because the approval for loan depend on how well you have prepared your case and present it. The lender also wants to earn a profit by offering a private mortgage and that too within a reasonable time-frame; you must be ready with all the right answers and satisfy the lender that he will be taking a right decision in financing your project.

There are many lenders out there but finding the right one is the real challenge and it might take some time to so be patient and dedicate your efforts and time to search ideal one.  It is only with the right mindset and preparation that you will be able to find the best Private mortgage lenders San Antonio who will be willing to help you and offer the best deal.

HOW HARD MONEY LOANS BENEFIT BORROWERS IN THE LONG RUN

 

Hard money loans can be described as a specific type of asset-based loans. When they apply for these types of loans, the borrowers receive funds that are secured by the value of a property of real estate. What is important to know is that these loans are paid back with a higher interest rate than conventional commercial or residential property loans due to the unusual nature and rules of the funding.

Hard money is a monetary loan used for a specific purpose and with specific criteria for its repayment. In the recent times, it has become an excellent source of capital for business owners and entrepreneurs. Lenders take the decision to lend the money based on the property for which the funds will be used which makes it an attract form of capital for house flippers and real estate developers. With better property prospects and higher resale value, the better chances the borrowers have of getting the loans approved.

Due to the complicated procedures that often take too long, people seek alternate means of funding when they are in need of quick capital. Hard money loans are ideal for such people who intend to make a quick profit and return the loan back in a short time especially homeowners, developers and investors who do not meet the criteria of traditional lenders.

Hard money loans offer immense benefits that are typically not available through banks or other lending companies. Some of these benefits include:

Lesser conditions

To obtain a hard money loan, the borrowers only need to satisfy the lender’s short list of criteria as compared to banks who have set-in-stone conditions that must be met at all costs such as income history, credit report etc. The entire process is long drawn and the borrower might either end up getting rejected or miss the deal. With fewer conditions, hard loans are simple and straightforward; the lenders focus on the borrower’s targeted real estate investment idea, and if the property has excellent value and the borrower has at least 20% equity to put into the deal, they agree to the loan.

Quick approvals

Hard money loans get approved way quicker than traditional bank or credit company loans. It can take as less as a few weeks to get the approval and financing borrowers need to break the deal if all the paperwork is in order and things move timely. The main reason hard money lenders approve the loans quickly is the shorter list of documents they require to proceed and the lender does not have to deal with corporate red tape like banks and thus, they can process the requests in short time.

No credit history

Hard money lenders have nothing to do with the borrower’s credit history as compared to banks that check the borrower’s credit history of the past few years. It is because the hard money lenders are more concerned with the value of the asset and the borrowers equity and as long as both meet the lenders expectations, they agree to the loan. This gives even those investors a chance to get the financing they need to step into the real estate world that are doing it for the first time and have no credit history or do not meet the criteria set by banks and other lending institutes.

No payment penalties

Another great benefit of seeking hard money loans is the absence of payment penalties. When the borrowers obtain loans from a big lending company, they are most likely to be charged with penalties if they pay off the loan before its maturation date. Hard money loan is free of all such penalties and borrowers can find a lender who is willing to give a loan without repayment penalties if they are ready to repay the loan soon than the agreed date.

People stepping into the world of real estate investment these days prefer hard money loans Houston due to the numerous benefits they offer even if they come with higher interest rates as the benefits outweigh the small inconvenience. However, before signing the dotted line, it is important for borrowers to check out the lender, have a detailed discussion and finalize the terms and conditions to ensure they get the best deal that helps them achieve the desired goals.