Business Finance and Real Estate Mortgage Lenders to Avoid

This business loan strategy article will describe the importance of avoiding "problem commercial lenders". The article will not name specific lenders to avoid, but key examples will be provided to illustrate why prudent commercial borrowers and commercial real estate investors should be prepared to avoid a wide variety of existing commercial lenders when seeking viable commercial mortgage and business financing strategies.

I have been advising business owners and commercial real estate investors for many years, and I have encountered many business financing and SBA loan refinancing situations which have involved commercial lenders that I would not recommend as a result. One of the most serious business finance - business opportunity financing and real estate finance scenarios is a lender that causes difficulties for their commercial borrowers on a regular basis. It is specifically this kind of commercial lender which informed commercial borrowers should be prepared to avoid unless realistic alternative SBA loan and commercial mortgage business loan options are totally impractical.

Misleading Yes or No Business Loan and Real Estate Mortgage Finance Situations

I published an earlier business finance article which reported the questionable technique of many local and regional banks to say "yes" when they mean "no". When this happens, a bank will attach non-competitive commercial mortgage terms to business loans instead of refusing the loan. Business borrowers should explore other business financing options instead of accepting such unacceptable commercial real estate loan terms.

Meaningless Pre-approvals for a Commercial Mortgage Business Loan or Business Opportunity Financing

Business borrowers often want an early pre-approval for their business loan. The apparent result of the preliminary business financing approval is that it will allow the borrower to make other business commitments which are dependent on the commercial mortgage being approved.

An ethical business lender will view any business loan approval as a serious and binding action. Borrowers should not expect that a such a business finance approval is routinely possible in a day or two.

Since this approach to pre-approvals frequently produces surprises for the commercial loan borrower, borrowers must be extremely wary of any commercial lenders that use this approach. There are several business finance lenders who provide this shortened and misleading version of a pre-approval within a few days of receiving initial applications.

Why should a lender use a questionable commercial loan pre-approval? Here are two primary possibilities. (1) To encourage the borrower to end their consideration of other commercial lenders. (2) To use a business financing pre-approval that is like a residential mortgage structure.

Since many commercial mortgage loans are arranged by residential mortgage brokers who are frequently unfamiliar with common business loan procedures, this reason will be especially applicable when dealing with commercial lenders that specialize in dealing with residential real estate mortgage brokers. This type of commercial lender should be avoided at all costs for most business financing situations.

Commercial Real Estate and Business Opportunity Appraisal Process - Business Financing Problems

For a business loan based on commercial real estate value, commercial appraisals are an essential step in business loan underwriting. A commercial mortgage appraisal is typically expensive and lengthy. Bypassing problematic lenders which have exhibited a pattern of commercial appraisal abuses will help the borrower by saving them money, time and frustrations.

Business Finance and Commercial Real Estate Mortgage Loan Options: Think Outside the Bank

In smaller metropolitan markets, it is not unusual for a dominant commercial lender to impose harsher commercial loan terms than would typically be seen in a more competitive business financing market. Such commercial lenders routinely take advantage of a relative lack of other commercial lenders in their local real estate and business market.

For many business lending and real estate finance scenarios, a non-local lender can probably provide better business loan terms because they are normally competing with other business lenders. It is not wise for borrowers to rely upon local banks for most business financing requirements.

Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.

Article Source: http://www.articlesbasecamp.com

Steve Bush is the CEO of AEX Business Finance and Real Estate Mortgage Solutions. Steve and AEX provide Business Opportunity Business Loan and SBA loan refinancing - commercial loan programs throughout the United States.

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