A hard money loan means funding a potentially viable project for which financing may not be easily available from conventional sources. The risks involved are greater, and so are the interest rates.

Hard money loans could be for bridge financing, debt consolidation, acquiring property, commercial deals and many other purposes. Lending decisions and loan disbursement are quick. Normally, collateral is required.

Commercial Loans

The general practice is to advance 40% to 70% of the value of the security offered. In some cases, loans beyond this limit would be considered. Only applications for amounts above a specified minimum amount are entertained.

Certain lenders refuse to advance money on the collateral of properties on which the borrower or his close relatives stay. Lenders often consider bad credit and high-risk applicants who may find it difficult to borrow elsewhere.

There are many lenders private lenders throughout the country that offer low or no money down financing programs for real estate investors. Because they are private there are only one ore two lenders that fund investors nationally. Even the national lenders do not lend in every state. As such the focus of this article is to focus on the program requirements for those lenders who finance properties in the Chicago metropolitan area.

No Money Down

Commercial Loans

This means no down payment to purchase investment property. Many investors are longing for the old days that hard money and bridge lenders would lend based on the equity of the property only. Those where the days of uncontrolled appreciation and values continued to rise beyond any logical means. Those were the days that novice investors thought that there was no way to lose money investing in property. The reality for many years there was no investment with a greater return than real estate.

Many lending institutions make available commercial real estate loans which are mainly for income producing and business related sites. This loan is not something that does not require much time with little preparation and your effort, which you won’t regret.

There are many projects you can go into using this loan. An example of such projects are shopping centers. This requires an environment that has a better location where people coming to do business in it will want to have their office in your shopping centers.

Commercial Loans

For any business to boom the location must be seriously put into consideration. You can’t get this loan and invest it in a business that will end up not yielding anything. If your building is not situated in a good atmosphere your building will just be empty because people will not appreciate it.

Entrepreneurs who are new to the process of raising capital almost always get discouraged at some point along the way. They become frustrated with the lack of positive reaction from investors. They really get frustrated with how slow the process is. Eventually they may even start to doubt themselves and the viability of their venture. If you’re looking for investors or small business loans. Here are some things to keep in mind:

1. Nearly every entrepreneur has had the same experience when they first enter the market for venture capital. No matter how frustrated you might feel, you are not alone. You should never let a lack of immediate positive response shake your confidence, or take it personally.

Congratulations. You have decided to go into business for yourself and are now looking for a loan to help launch your business. In this downturn economy, getting a commercial loan can be a lot more difficult as more companies are cautious with lending money. Lenders in general are also very weary to lend money without having some type of guarantee, especially if you are a business that is not established. Although you do have challenges ahead of you, it is still possible for you to get a commercial loan. The following are the steps you’ll need to take to get the funding that you need.

Commercial Mortgages are also used to buy existing businesses consisting of property or land for development. Commercial Mortgages can used for the following: Farms Pubs, restaurants, night clubs, take-away units Shops, shops with living accommodation Hotels, guest houses, B&B’s, holiday lets Industrial units, factories, offices, warehouses. Taking out a Commercial Mortgage on a property might be the best way for you to get your hands on your next business venture. The project could be purchasing a brand new building or buying land. It’s fairly complex entering the world of the business finance but with a broker working on your behalf the entire process is sure to be easier. Problems like no proof of income, county court judgments or a poor credit history will become problems of the past because there are Self Cert Commercial Mortgage packages covering up to 85% of the property’s value.

The refinancing of commercial property often occurs for the same reason a person might refinance their home – to reduce high interest rates. The owner may also be looking into refinancing in order to obtain cash from the equity that has been built into the property over time. Regardless of the reason there are few points to remember if you are thinking of refinancing your commercial property.

1.Any capital obtained from the refinancing of the property should be reinvested in the property itself. Any other use of the cash and the interest paid on the new portion will not be tax deductible. This cash-out amount will be considered a consumer debt if its use was found to be outside of the property and is therefore no longer tax deductible.

This article describes 12 recurring problems with commercial real estate loans that commercial borrowers and their advisors need to anticipate before it is too late. The following problems are common in traditional bank commercial real estate loans and should be avoided if feasible (special circumstances will periodically make some of these terms unavoidable).

COMMERCIAL REAL ESTATE LOANS PROBLEM NUMBER 1: Tax Returns versus Stated Income

Commercial Loans

Most traditional banks will require several years of tax returns in order to qualify for a commercial real estate loan. The alternative is to use a Stated Income lender that does not verify personal income or assets. Many borrowers will simply not qualify for a commercial mortgage loan if tax returns are used due to high business expenses (and low net income). Many lenders using tax returns will also continue to verify income after the loan closes. Stated Income lenders will not engage in this practice.

Commercial loans are obtained for many different business ventures. For this reason there are different types of commercial finance. They in general, is for the purchase of property. It is like a loan to buy a home. The property becomes the collateral to secure the loan. Upon the pay off of the loan the business owner will then own the property. Additionally, like a home loan, a business owner can use the equity in their property to get future loans.

Commercial loans at 90% though rare, are still an option. Owner occupants will have more 90% financing options than commercial real estate investors.

90% Commercial Loans For Investors

Commercial Loans

Straight 90% financing for investors, as far as we are aware no longer exists. 6 months to one year ago there were a few lenders that offered 90% financing but there rates where normally 1-3% higher than typical rates at 80% financing. The way investors still can structure 90% financing on investment properties is to have the seller hold a second lien position loan. Yes this might be obvious for you, but you should not just assume this is easy to get done. Most funding sources out there will not allow any type of second lien loans. So to find a bank that will allow this shouldn’t just be blown off.