How To Use Commercial Interest Only Loans For Your Business

Commercial interest only loans may be one of the best ways to ensure that you business grows. There are many different ways that you can make your finances provide the best return for your investments. It is important to remember that you do not have to accept the first offer that a bank gives you in terms of a loan or financing for your business. Not only are there many different types of banks that provide financing for business projects, but there are other financial institutions that provide excellent services and financial solutions for small and medium sized businesses. In fact, it may be better to approach an independent financial services company for financing as many commercial banks in America are continuing with their belt tightening programs while riding out the last of the recession.

Commercial interest only loans are a very common form of credit in business. You do not just have to use commercial interest loans for real estate financing. A commercial loan can be any loan made to a business that will aid their business operations. This is also known as working capital, and many businesses today apply for commercial interest only loans to finance new projects or expand their existing business operations. In real estate investment and property development though, a mortgage lender will not commit to an interest free loan for a lengthy period of time. Instead, they will often provide businesses with commercial interest only loans during the construction period, or, in the case of an existing building, the renovation period.

The way that commercial interest only loans work is that you have the chance to pay a much lower monthly rate during the first months and even years of the loan. You only pay the interest on the loan for a predetermined amount of time. This allows you to have a much lower initial payment program which will benefit your business during its inception, easing your financial burden while you are still waiting for a return on your investment. Commercial interest only loans allow you to add to your payment each month only if you’re ready to begin paying off the borrowed capital. It helps to control the cash flow through a business.

There are a number of ways of applying for the many types of commercial loans available to businesses and investors. In most cases, you should have a look around for a financial institution that is able to process your loan application fast and effectively at the best rates available. You do not always have to go to a bank to apply for a loan like this. Many trusted companies can guide you through the process of securing a commercial interest only loan online.

The Loan Process for Commercial Income Property

With commercial income property being such an important sector of the real estate industry, it is important to have access to high quality loan broker training. In this article we run through the loan process for commercial income property.

The loan broker, sometimes referred to as the correspondent lender in the industry, is required to carry out several tasks in their professional role. These tasks involve: finding new clients, building a rapport with them, assisting with their loan application, understanding their financial circumstances and reviewing their business proposals.

The first step of the loan process is to find clients. This may involved marketing or advertising in publications that are appropriate for the audience that you can secure them from. For example, business for sale websites and publications are ideal, alternatively investment publications also reach this type of market.

Once a potential commercial loan client has been identified, the broker will work together with their client to put together the loan package. This will involve analysis of financial information and completing the application for the loan. The correspondent lender will then liaise between the client and the lender. It is important at this stage for the correspondent lender to understand which lenders and products may suit the circumstances of the client.

Gathering of information would now commence with the client providing financial information and history to the correspondent lender. The broker will need to assess the situational and financial circumstances of the client in order to present the best case to the lender of the commercial real estate loan. It is now key not to overwhelm the client with a barrage of financially related questions, as they may feel under pressure, but to be able to find out information for the application.

Support and knowledgeable guidance should be interwoven into conversations with the client. This will go a long way with the client feeling as though they have selected a correspondent lender with the expertise and experience to take them through a successful commercial loan transaction.

With homework, and by asking the right questions, it is possible to discover and record all information that will enable the client’s application to be completed within one meeting. Meet with the client wherever they keep their financial documents, this may be at home or their place of business. This enables the correspondent to be able to immediately assess and review the information as it will be at hand to the client.

Careful guidance of the commercial income property transaction will need to be provided by the correspondent lender. Commission from the lender will not be paid until the transaction has been agreed and closed. Keeping a positive mind during a transaction is essential for there to be a positive ending. It might be that there are several possibilities to explore with the client and / or lender as the process is underway.

By following these guidelines, a correspondent lender should be able to bring the transaction to a successful and speedy conclusion. Most commercial income property loan transactions of this nature will take 90 days to complete.