Business Financing and Commercial Loan Lenders to Avoid

By: Stephen Bush..

I have published many articles which are designed to assist commercial borrowers in avoiding commercial loan problems. One of the most serious commercial mortgage business loan situations is a commercial lender that causes problems for their commercial borrowers on a recurring basis. It is particularly this type of commercial lender which prudent commercial borrowers should be prepared to avoid unless viable alternative business financing options do not realistically exist.

As a direct result of my commercial loan experiences advising business owners for over 25 years and regular conversations with other business financing professionals, I do in fact believe that there are a number of commercial lenders that should be avoided. This conclusion is based on a recurring pattern of lending abuses by some business lenders.

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 should be prepared to avoid a wide variety of existing commercial lenders when seeking viable commercial mortgage and business financing strategies.

Ineffective Pre-approvals for Business 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 an 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 lenders who provide this shortened and misleading version of a pre-approval within a few days of receiving initial applications.

Why do several business lenders utilize misleading business loan pre-approvals? There are several motivations and here are two of them. (1) To employ a commercial mortgage pre-approval approach that is similar to a residential loan process. (2) To prompt the commercial borrower to stop considering other lenders.

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 mortgage brokers. This type of commercial lender should be avoided at all costs for most business financing situations.

Yes or No for a Commercial Mortgage Business Loan?

I published an earlier 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 loan terms.

Think Outside the Bank for a Commercial Mortgage

It is not unusual for the leading business lender in some markets to use more restrictive commercial mortgage terms. Such lenders often take advantage of a lack of other local commercial lenders.

It is not necessary for borrowers to use only local banks for business loan needs. A wise strategy for business borrowers is to actively consider non-bank commercial mortgage alternatives.

Commercial Appraisal Process and Business Financing Problems

For a commercial loan involving commercial real estate, commercial appraisals are a necessary part of the business financing underwriting. A commercial appraisal is usually costly and time-consuming. Eliminating business lenders which have known problems with commercial appraisals will help business borrowers to avoid frustrations as well as save money and time.

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

Article Source: Loan Info Center

Steve Bush and AEX Commercial Financing Group provide commercial mortgage - commercial loan and business cash advance - credit card processing assistance
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