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Commercial Mortgage and Working Capital Business Loan Choices

By: Stephen A. Bush

Commercial borrowers need to realize that they have more commercial loan options than they think. These business financing options are referred to here as "Thinking Outside the Bank" because most commercial borrowers believe that a bank is the best source for a commercial loan. Non-traditional business lenders are commonly considered to have the competitive edge for a variety of business financing situations.

Here are two brief examples about how a commercial borrower is likely to benefit by "Thinking Outside the Bank". In many situations a traditional bank will provide a commercial mortgage but will include non-competitive covenants and terms. In other cases a traditional bank will decline the business loan because they do not provide commercial financing to the commercial borrower's particular type of business.

Commercial loan borrowers might feel that a bank is their most likely source for business financing. However, since traditional banks usually focus on a few types of businesses, non-traditional business lenders should be emphasized for any business loan situation. Therefore the recommended commercial mortgage strategy discussed in this article is to "Think Outside the Bank".

As I reported in a previous business loan discussion, in many commercial mortgage situations it is common for a local bank to assess stricter commercial loan conditions than would typically be seen in a competitive business financing scenario. Such banks can often take advantage if there are few business lenders in their market.

An effective response by borrowers is to emphasize business financing options other than the traditional ones. It is not wise for business borrowers to depend only upon local banks for commercial loan possibilities. For common commercial financing circumstances, a non-local business lender can frequently provide the best business loan terms because of competition with other business lenders.

There are at least three commercial loan situations in which business borrowers will typically experience that non-traditional lending sources can provide conditions that are best for the borrower: (1) commercial mortgage loan programs; (2) credit card factoring programs; and (3) working capital management programs for credit card processing.

Business Financing Programs - Commercial Mortgage Alternatives

Two of the most prevalent commercial real estate loan obstacles can be precluded with a "Think Outside the Bank" mentality by businesses. The first commercial mortgage obstacle is the common practice of most banks to decline business financing for special purpose commercial properties such as churches and golf courses.

The second business financing situation is the typical practice of most commercial banks to attach balloon and/or recall provisions to their commercial mortgage loans (which means that the bank can require early repayment of the commercial loan under various conditions). Both of these undesirable business loan situations can usually and easily be avoided by considering a non-traditional and non-bank lender.

Business Loan Options - Business Cash Advance Programs

Business owners that accept credit cards will frequently qualify for a working capital business loan via credit card financing. Traditional lenders will often be very poor candidates to consider if a business needs help with a business cash advance.

Because even thriving businesses frequently need more cash than they can borrow from a bank, it can be of critical importance for a business to "Think Outside the Bank" and locate non-traditional lenders to assist with this business financing need.

Credit Card Processing Programs - Working Capital Management Choices

The choice of an appropriate credit card processing service can be instrumental in improving the profitability of businesses with a high volume of credit card activity. The analysis of credit card processing providers can be effectively combined with the credit card factoring and credit card receivables process described above.

In assessing a business cash advance program, it is frequently possible to simultaneously arrange for a substantial improvement in the merchant's credit card processing program. Because traditional banks are usually not competitive in providing assistance with credit card factoring, it is equally likely that a non-traditional lender will be the primary source of effective and competitive help with credit card processing.

A closing business loan observation: I have written another business financing article about avoiding certain commercial lenders. I want to stress that there are both non-traditional and traditional lenders which should be bypassed.

When business owners are "Thinking Outside the Bank", they should be ready to avoid troublesome non-traditional business lenders in their quest for worthy working capital management dealing with commercial real estate loans, credit card financing and credit card processing.

Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.

Article Source: http://www.simplepetcare.com/pet-articles

Contact Stephen Bush at Church Loan Financing - Business Loan Solutions for unique and straightforward commercial real estate financing advice
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