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Business borrowers have more commercial mortgage loan alternatives than they realize. I refer to these business loan alternatives as "Thinking Outside the Bank" because a typical commercial borrower probably believes that a bank is the best source for a commercial mortgage loan. Non-traditional business lenders are usually viewed as having the competitive edge for many common business loan scenarios. 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. Some business loan borrowers are likely to feel that a traditional bank is their best source for a commercial mortgage. However, because most traditional banks focus on a small number of established industries, non-traditional (non-bank) and non-local commercial lenders should be considered for most business financing situations. Therefore the recommended commercial loan strategy (as discussed in this article) is to "Think Outside the Bank". As I described in a prior commercial loan report, in many business financing scenarios it is typical for a traditional bank to require more business loan covenants than would normally be seen in a competitive commercial mortgage situation. Traditional banks can unfortunately take advantage of a shortage of commercial lenders in their local market area. A prudent response by business borrowers is to consider non-traditional commercial mortgage options. It is not necessary for borrowers to depend upon traditional banks for business loan strategies. For typical commercial loan scenarios, a non-bank lender can often provide better business financing terms because of the competitive market situation. There are several business financing situations in which commercial borrowers will frequently find that non-traditional commercial lenders are better positioned to provide terms that are more advantageous to the commercial borrower: (1) commercial real estate loan programs; (2) business cash advance and credit card financing programs; and (3) credit card processing programs. Business Financing Programs - Commercial Mortgage Alternatives Two of the most common commercial mortgage difficulties experienced by commercial borrowers can be avoided if they "Think Outside the Bank". The first business financing situation is the prevailing practice of traditional banks to avoid most special purpose properties (such as funeral homes and churches). Another commercial financing scenario is the common practice of commercial banks to include recall terms in their business loans. With such terms the bank can require repayment of the commercial mortgage under stated conditions. These undesirable business financing requirements can usually be eliminated by using a non-bank commercial lending option. Working Capital Business Loan and Business Cash Advance Programs - Business Financing Alternatives Most businesses that accept credit cards will qualify for a business cash advance with their credit card receivables. Traditional banks will typically be very poor candidates to consider if a business needs assistance with credit card factoring and business cash advances. Because successful business owners typically need more working capital than they can obtain from a bank, it is important for a business to "Think Outside the Bank" with non-traditional lenders to help with this working capital management function. Commercial Loan Alternatives - Programs for Credit Card Processing Management 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 financing thought: I have written an earlier business loan article about commercial lenders to avoid. It should be noted that there are in fact both traditional and non-traditional (non-bank) lenders which should be avoided. 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.financemanual.com
About the author: Steve Bush provides candid working capital management advice. Free series of business cash advance reports Click here to get your own unique version of this article: Uber Articles directory.
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