Business Capital Loans Info: How to Determine If Your Business Requires Working Capital Funding

Working capital loans can be used to help companies pay for their operational costs. The net capital is also defined as the difference between a business’s current assets and liabilities. It’s the amount of money the company has currently as its disposal to pay for daily and immediate expenses. If you are having trouble meeting those financial requirements, then you’ll want to look into business capital loans.

However, there are instances when an organization might have more than enough in working capital all the time, yet it still might not be a good thing. This could be a sign that the business isn’t utilizing its assets to the fullest, and you might want to look for better ways to utilize those assets.

Regardless of why you think this kind of loan might be right for you, it’s important to understand the working capital ratio to help you determine how much money you should request. In terms of financial health, you will want a ratio betw

Read More

New Business Loans Guide for Small Business Owners and Entrepreneurs

It’s not the easiest thing in the world for a new business to obtain the money it needs to help get started. New business loans can be difficult to get unless you have excellent credit and a good plan in place. If you can get approval, you’ll get the proceeds you need for things like working capital, equipment, supplies, machinery, inventory, advertising, or maybe even real estate construction or commercial building rental.

One thing many lenders will expect you to do is determine your personal equity. How much of it will you be able to bring to the table? Lending institutions tend to require that you are able to bring 20% – 40% of the total loan amount you are requesting.

In the 21st century, there are many more options available for start-ups than the traditional loan from a bank. However, before you apply for any type of funding, you must prove that your company qualifies as a small business. Small businesses are usually measured by factors such as

Read More

Commercial Finance at Home Loan Rates

Its been a long time coming, but you can now use your residential property for commercial finance without being penalized on rates.

Generally in the past, if you were to use a residential property for “business purposes”, the bank would say well – even though it is residential, the purpose is commercial finance so we will do a “business” rate which has generally been a higher rate than your typical home loan rate.

This started to change about 4-5 months ago with ING doing their mortgage simplifier rate for use in financing commercial property. So if 40% of the purchase price was from residential finance, and 60% was at commercial finance rates, it was much more competitive. The loan term of 30 yrs with 5 yrs interest only is also more attractive with this type of loan, because average repayments are lower, however if you wish to pay more you can.

Then in the last month, another mainstream institution has allowed their best residenti

Read More

Commercial Real Estate For Business Owners

With interest rates now at historically low levels and the United States economy growing at a strong pace, many business owners have been considering the purchase of commercial real estate for their business locations. The benefits and drawbacks to commercial real estate ownership vary from business owner to business owner but potential buyers should educate themselves about the obvious and sometimes hidden benefits to the ownership of a commercial property. Below are some of the major benefits to ownership as opposed to leasing a commercial space.

Tax Deductions

For many business owners one of the primary benefits of commercial real estate ownership are the tax deductions that can be taken on the interest portion of the monthly commercial loan payment. These deductions can be substantial and each business owner should consult a qualified tax specialist about their unique situation.

Equity Appreciation

On average, commercial real estate prop

Read More

Commercial Banking Price Leadership

Banks then use this money to make loans available to household and corporate borrowers. They then earn their profits by lending at an interest rate higher than the rates they pay on their deposits.

The largest commercial banks in the US bank of America, Bankers Trust Corporate, Chemical Bank, Chase Manhattan Bank, Citibank, Morgan Guaranty Trust Corporation and Wells Fargo, and many others compete with each other to make loans available to large corporate clients. The interest rates they charge corporate clients for loans are the main form of competition, a price competition, in this case. When this competition becomes aggressive, the interest rates they charge have a tendency to fall, and so do their profits. To avoid this aggressive competition, a form of price leadership was put into place.

The interest rate charged by banks to large corporate clients is called the prime rate. This rate is well known and often quoted in newspapers. Most large banks charge the same o

Read More

Commercial Mortgage Loans – What Rates Do Hedge Funds Charge For Commercial Mortgages?

The ongoing credit crisis has made it much more difficult for investors to qualify for an institutionally funded (bank, broker, insurance company) commercial mortgage loan. Underwriting standards have become significantly tougher and loan parameters have tightened. Very few deals are being accepted by the banks, and even fewer are actually closing.


Many good loans that should receive financing are being rejected out-of-hand. We call this situation the “funding gap.”


Recently many hedge funds and private equity companies have recognized that opportunity exists for firms that can help fill the funding gap by offering private commercial mortgages to quality borrowers who have been shut out by their banks. Over the last 18 months money managers have committed hundreds of millions of dollars to the commercial real estate finance sector. They are buying distressed mortgage paper directly from troubled lenders and th

Read More

Lending Blind – What You Don’t Know Can Hurt You

There is no question we are in a fiercely competitive commercial lending market. Banks and other lenders have more money to lend than credit worthy borrowers seek to borrow. Interest rates remain historically low. Pressure continues to mount to lower lending costs to attract new customers.

Commercial real estate lending is no exception. Banks and other commercial lenders are battling for borrowers and, in the theme of cutting costs, many are placing more responsibility for documenting commercial real estate loans on loan processors with only limited knowledge of the fundamental risks involved. An unfortunate consequence is that many lenders are “lending blind”.

What is “lending blind”? Lending blind is approaching commercial real estate lending with substantially the same approach as lending to residential homeowners. Lending blind is making loans secured by commercial real estate without fully understanding the underlying commercial real estate

Read More

How to Get the Best Rate on Your Commercial Mortgage

Commercial mortgage borrowers often ask us how lenders determine the rates that they offer on commercial mortgage loans. There are many criteria that lenders use when determining rates, but lenders will assess the relative risk of a loan when reviewing a loan application. The lower the risk, the lower the rate. The higher the risk, the higher the rate. It is important to understand what factors are important to lenders and underwriters.

– Borrower Qualifications. Lenders will analyze a borrower or guarantor’s net worth, liquidity, cash flow, credit history and real estate experience in determining overall risk. Lenders like to see borrowers with a good history owning and managing similar properties. They want to see sufficient cash reserves to cover unexpected issues that might arise and they expect to see that borrowers have a good history of paying their bills in a timely matter.

– Property location and market. Good quality properties in large metro

Read More

A Short Primer To Get A Canadian Commercial Mortgage In The US

Owning a commercial property in the United States is the dream of almost every Canadian citizen living in the USA. Many of them have no idea of how to obtain a commercial finance or mortgage. Certainly, purchasing a commercial property in the US presents its own challenges, if you are not a US citizen, rather a Canadian. As per a survey by the National Association of Realtors (NAR), more than half of the property transactions are done in cash in the US.

However, commercial mortgage lenders are willing to extend credit to Canadian citizens on attractive terms. Sometimes these lenders even provide credit to them without a credit history in the US. Getting a commercial mortgage depends on the residential status of the Canadian citizen. Canadian borrowers can be categorized into the below categories based on their residential status.

  • Non-permanent residents with a valid Work Visa (G1-G4, E1, E2, H1B, L1, H3, H2B, and H2A)
  • Permanent Residents with a Gree
Read More

Commercial Real Estate Financing With Many Ways to Make the Grade

Commercial real estate financing is currently being used for many different types of profitable business ventures: office buildings, retail outlets, apartment complexes, storage facilities, and the list continues to grow. At the present time, business loan rates are still reasonable enough to capitalize on the hospitality hotel/motel industry as well; business loans are also being used by investors to purchase storage unit facilities across the country, meaning that opportunities abound for those who are interested in making some serious money.

As the state of the economy moves well past its recovery stage, commercial real estate financing is helping new business owners get established, while the seasoned veterans are taking advantage of refinancing via expansion.

Becoming familiar with a business loan calculator can help newer company owners get a quicker handle on their finances. Office building and/or storage facility owners opting for adjustable r

Read More