Commercial Loans Need to Start a Business

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Is it possible to start your small business even without cash on hand? The answer is yes! There are agencies, firms or banks where their sole mission is to help entrepreneurs to start a business. This system is what we call, commercial loan.

Commercial Loan is very common in the world of business. The lender allows investor to apply a loan and granted it to use for to start a business. Other existing establishment also avail this type of loan by lending funds for basic operational purposes like purchasing materials or machineries, supplies, goods or even funds for employment payrolls. This loan is design for a shorter term basis, renewable so the investor secures funds needed and repay it within the agreed terms.

This kind of loan takes a longer time to process. After the submission of the investor application, it will be screened and under meticulous reviews on your credit reports and clearing procedure. This process of prequalification is done to determine if the debtors is capable of repaying the lenders. In some cases, to cite some opportunities or specific loan plan that is suitable for the debtor capability.

After the submission of requirements, it is reviewed and checked by the loan personnel for an additional requirements needed such as your financial statement or bank statement and collateral. If everything is completed; the process is move to the next step where the decision-making occurs. Where the lender determine the specified amount granted. The lenders provide the designated contract, inclusive of the terms and conditions of both parties (debtor and lender). The term should be discussed properly, let the debtors understand the conditions like the amount granted, interest rates, mode of payments, types of security (assets) as well as the penalties if late payments happen plus the other key terms. If your loan is approved after two to five days the granted amount will be given to you in the form of check, bank to bank or wiring transaction.

This is only if you passed after reviewing your credit history. How about if you had bad credit history? Can you still avail any loans so that you can use as starting capital to your business? The answer is still yes, because bad credit consolidation loan is available nationwide.

Seek debt consolidation services near you. If you are living in Chicago, then try the Chicago debt consolidation directories. These groups will provide your some plans that might help change your credit history, paid off your debts and encourage you to increase your savings. They will grant you a loan with lowest interest rates, in order to solve your problem and at the same time, help you start your own business. Yet, not all debt consolidation companies are best option. Provide extra cautions in seeking this kind of services. Make sure that the debt consolidation companies you are working with, is a legitimate, have good reputation and a long-standing company.

In conclusion, even if you are engaging to the debt consolidation services it is still best that you understand the agreed terms, to avoid trouble in the future.

Commercial Loan and Commercial Mortgage - Same or Different

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At the end of 2010 there were estimated to be about 5.2 million commercial properties in the UK - an expansion of 32% over the last decade. Despite the economic downturn and gloominess, the credit crunch is often not visible when you visit a commercial property auction. In the last five years, commercial property deals increased by ??7.7 billion, according to the Bank of England. So how are people acquiring so many commercial properties? The answer is with a commercial loan or a commercial mortgage. It appears leverage is still available for the right deals in the commercial world.

In simple terms, a commercial mortgage is a loan taken out using a commercial property rather than a personal property as security. How much can be borrowed? Typically a LTV of 70-75% can be available, though unsurprisingly this figure has dropped in recent years. The Lender will also be keen to look at the Borrower's ability to repay so producing a well-kept set of business accounts for a minimum of three years is also a necessity. If it is shown that the business is unlikely to generate the cash flow to meet interest and capital payments then the Bank will prudently weigh this against the Borrower. In addition sometimes the loan may also need to be secured with personal guarantees, depending on the covenants of the Borrower. On the plus side, interest payments are chargeable against profits for the Borrower providing a strong tax advantage to profitable Borrowers and terms can be extended up to 25 years, much like a residential mortgage. Not all lenders will offer this type of loan though; only a commercial lender who specialises in commercial property loans and it certainly pays to use a specialist broker and shop around.

So what's the difference between this and the other commonly used term a commercial loan? The answer lies in security. A mortgage, by definition, is secured against a property whereas a loan, doesn't have to be, though often is. The loan allows more flexibility, can be used for a wider variety of purposes and, of most importance to a rapidly expanding business, can be set up quickly whereas a mortgage will require detailed valuation reports and legal documentation to be drafted. There is a difference too in rates and term. Unsurprisingly, because the mortgage is secured on a property it likely comes at a better interest rate - a reflection of the reduced risk for the Lender - and it generally can run for up to 25 years whereas the loan will probably be a revolving facility capped at 5 or 7 years.

Choosing which one is best is a matter of tailoring the requirements of the business. A mix of both is likely to be present in any business with the mortgage providing a backbone of long-term funding supplemented by a revolving loan facility. Either way the key thing to be conscious of is the ability of the business to repay. Defaulting on either is unpleasant, whatever the terms used!

Copyright ?? 2011

Choosing the Right Lender for Your Loan

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It can be hard to choose the right lender when you are looking for the right business to deal with for your loan. For fast loans and really any type of loan you will want throughout your life there are a few things you need to consider when choosing the right lender. Here, we've listed our top tips you won't want to miss:

• Begin your search online- Many lenders now have wonderful websites for you to browse and find out all of the information you need to know. Rather than going in to see them in person first, going online allows you to browse their offerings at your own pace without being rushed. Take your time and make sure you understand the types of loans they offer and the conditions relating to each.


• Compare a few lenders- Don't go with the first one you find. It can be easy to do, as they seem to tick all the boxes, but you should compare at least two others in detail with them before committing to one. This will make sure that you really are getting the best loan option to suit your needs.


• Take your time to decide- When you need cash fast, it can be easy to rush in and have a loan authorised without even completely knowing the full terms and conditions, which you may or many not regret later. Take the time to really understand what the repayments are and any other factors that you need to be aware of.


• Specific lenders offer specific loans- There are so many different loans available on the market, because there are so many different reasons why people may require a loan. It is a good idea that you go with a lender that specialises in the loan that you need. For instance, there are businesses that specialise in cash loans and making sure you get the money you need fast. You wouldn't go to a major home loan lender for this type of loan.


• Upfront communication and good customer service- You want to make sure that the lender you get your loan from is upfront with the conditions of the loan, communicates clearly and professionally and provides you with a high level of customer service. This is so important to your dealings with the lender in the future after the loan is processed. You don't want to be having to deal with someone who is unprofessional or provides you with poor customer service.

When looking for the right lender for the loan you want there are a few things to consider. By taking your time, comparing and making sure you find the right lender to suit your needs, you should be happy with your loan and the conditions attached to it. I hope our list of tips on choosing the right lender has given you some ideas on how to decide on the right lender for the type of loan you are looking for.

Business Loans Glossary Part 4 - Property Development Finance to Yield

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Business Loans - Knowing Your Banker

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Most business owners think that a bank is a place to go to only when they need to borrow money. Though a bank is certainly obligated to review your application process even if you walked into a bank for the first time, you will have a much better chance of being approved if you had a prior relationship with the bank or the bank manager.

To understand this a little better, you will need to be reminded about the simple economic principles that makes banking possible. Banks, just like any other business, need customers. Their customers are predominantly made up of savings and checking account holders who deposit money into the bank on a temporary basis. When the banks receive thousands of these customers, they will start to build up a capital or a reserve which they can then lend out to businesses. They also use the deposits to invest in various securities which will make them money.

Thus, when you walk into the bank for a loan application, one of the first things you will be asked is if you are a customer with the bank. If you are, you will be greeted warmly. If you are thinking about getting a business loan in the future and have a particular bank in mind, it will greatly help your cause if you went to that bank today to open a savings or checking account. Also, ask for an appointment with the bank manager to discuss potential investment options with the bank like money market accounts of certificates of deposits. The bank will also offer other useful services such as credit card processing brokerage and cash management. Sign up for one of those services and keep a good working relationship with the bank for at least a period of about six months or so.

You can then approach the bank for that business loan you need and you will be surprised at how well you are treated. There is no guarantee that they will approve your loan just because you are a customer. That being said, a banker might be able to look at your application, point out weak areas and then resubmit your application in a manner that gives it the best chance of being approved. Having a banker on your side is worth its weight in gold.

The days of sealing a deal with a handshake have passed for the most part and that is unfortunate. This doesn't mean personal relationships still can't be of huge help to getting things done in business. This is particularly true with your banker.

Business Finance Alternative - The Merchant Cash Advance

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Business finance, as many a business owner knows, can be tricky to secure with a stringent application process.

Due to the economic climate, the banks are much more reluctant to lend and tend to be much stricter when assessing applications for business finance. Even if you do get accepted for the business loan, there are usually strict monthly repayments and early repayment charges if you wanted to repay the balance early.

Bank business loans aren't the only form of finance available however. There is a business finance alternative that is quickly growing in popularity. It is known as a merchant cash advance and is available from many lenders who have a strong online presence.

Many of these lenders have built up a strong reputation for providing a flexible business finance alternative.

What makes the merchant cash advance so flexible is the fact that there are no fixed monthly repayments. The balance is repaid from an agreed percentage of your customer's future credit and debit card transactions.

If your business processes more than ??3500 per month in card transactions then there is a good chance you will qualify as acceptance rates are exceptionally high.

This flexible repayment method means that if your business picks up and you start to process more card transactions then the advance will be repaid quicker than anticipated and likewise if your business is experiencing a slack period then you don't have a fixed monthly payment, like with a business loan, that may hurt your cash-flow.

Some online merchant cash advance lenders have 24 hour online tracking systems meaning you can see exactly where your advance is up to any time day or night.

I was reading about one small business who used a cash advance, and they wanted to extend their range of stock and needed about ??15000. They had sourced a real bargain on a batch of great products that they knew they could turnover quickly but didn't have the funds to purchase.

They used the cash advance as a business finance alternative as their bank declined them for the loan. Apparently everything went to plan and the stock did indeed sell quickly which meant that they repaid the cash advance much quicker than anticipated.

The application process for a merchant cash advance also tends to be much simpler than a bank loan and the money is usually available within two weeks.

So if your business needs finance then don't just look at the banks. Consider all business finance alternatives including the merchant cash advance.

Bad Credit Business Loans - No Credit Check

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These tough economic times seem to be the best time to start your own business. So many folks are facing unemployment with no prospects of finding a good job, the only viable way to sustain oneself is starting a business. But, because these tough economic times have caused a lot of people to take big bad hits on their credit reports, finding the funds to start up or grow your business can be tough to do.

Some Lenders Willing to Help Small Business Borrowers

Because so many borrowers have taken hits on their credit reports, and because traditional lenders may not be willing to underwrite such loans, private lenders have stepped in to provide them with the funds they need to start or grow their businesses. Many of these lenders can be found online. You should talk with others, even strangers, who have a small business and ask them how they went about getting the funding they needed.

You Must Have a Dream of Success

Of course, funding is important. But the driving force behind making a business work is having a dream. Having good knowledge of how what you have to offer in terms of business is something that is needed and will reward you with success and a very decent income. No matter what difficulties you may face, especially in the form of funding, the dream is what will help see you through. Do not give up - you can make a go of it.

Know Yourself and Know Your Business

The first thing you must do is have a solid business plan. You need to know how much you need to start the business, how much you will need to survive until the business takes hold, and how much you can afford to pay each month. You should make every effort to keep your personal finances separate from your business finances. Without a solid plan and a solid budget, not many lenders are going to be willing to talk to you. Not even private lenders.

Government Lenders and Private Lenders

Once you have a solid plan and budget, you need to cast your search net wide. You should approach traditional brick and mortar financial establishments, these folks can help you land small-business government loans that carry very low interest rates with very generous repayment terms. When you first start thinking about funding, be aware of what the government has to offer. Avail yourself online of the resources available through government and other sites. Check out the Small Business Administration.

Some Lenders Willing to Go the Extra Mile

Do not be discouraged if you are turned down in the traditional venues. Plenty of private lenders are out there who are willing to help out the small businessman or businesswoman. However, with these lenders you may find the interest rates somewhat more hefty than those of the traditional lenders or government lenders. On the other hand, you may find that some of these lenders are willing to go the extra mile if they believe what you believe about the prospects for your business success. They may be willing to cut you some very interesting or innovative ideas when it comes to the cash you need.

Do Not Forget Who Helped

Whatever you do, make sure you meet the repayment conditions specified in your loan contract. You may not have the best credit, but you will want your business to have excellent credit. After all, that is part of the dream of owning a small business.

These tough economic times seem to be the best time to start your own business. So many folks are facing unemployment with no prospects of finding a good job, the only viable way to sustain oneself is starting a business. But, because these tough economic times have caused a lot of people to take big bad hits on their credit reports, finding the funds to start up or grow your business can be tough to do.

Some Lenders Willing to Help Small Business Borrowers

Because so many borrowers have taken hits on their credit reports, and because traditional lenders may not be willing to underwrite such loans, private lenders have stepped in to provide them with the funds they need to start or grow their businesses. Many of these lenders can be found online. You should talk with others, even strangers, who have a small business and ask them how they went about getting the funding they needed.

You Must Have a Dream of Success

Of course, funding is important. But the driving force behind making a business work is having a dream. Having good knowledge of how what you have to offer in terms of business is something that is needed and will reward you with success and a very decent income. No matter what difficulties you may face, especially in the form of funding, the dream is what will help see you through. Do not give up - you can make a go of it.

Know Yourself and Know Your Business

The first thing you must do is have a solid business plan. You need to know how much you need to start the business, how much you will need to survive until the business takes hold, and how much you can afford to pay each month. You should make every effort to keep your personal finances separate from your business finances. Without a solid plan and a solid budget, not many lenders are going to be willing to talk to you. Not even private lenders.

Government Lenders and Private Lenders

Once you have a solid plan and budget, you need to cast your search net wide. You should approach traditional brick and mortar financial establishments, these folks can help you land small-business government loans that carry very low interest rates with very generous repayment terms. When you first start thinking about funding, be aware of what the government has to offer. Avail yourself online of the resources available through government and other sites. Check out the Small Business Administration.

Some Lenders Willing to Go the Extra Mile

Do not be discouraged if you are turned down in the traditional venues. Plenty of private lenders are out there who are willing to help out the small businessman or businesswoman. However, with these lenders you may find the interest rates somewhat more hefty than those of the traditional lenders or government lenders. On the other hand, you may find that some of these lenders are willing to go the extra mile if they believe what you believe about the prospects for your business success. They may be willing to cut you some very interesting or innovative ideas when it comes to the cash you need.

Do Not Forget Who Helped

Whatever you do, make sure you meet the repayment conditions specified in your loan contract. You may not have the best credit, but you will want your business to have excellent credit. After all, that is part of the dream of owning a small business.