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A business loan to buy a business involving either golf courses or funeral homes is among the most difficult commercial mortgage scenarios. Golf course financing and funeral home financing involve special complexities not found in typical business financing situations. In both cases refinancing is usually even more difficult than the commercial loan to purchase. Reduction in Commercial Lenders - Golf Course and Funeral Home Financing To further compound the already difficult business financing for either a funeral home or golf course, fewer commercial lenders are providing competitive commercial mortgage business loan terms. There has especially been a significant reduction in the number of local and regional banks providing commercial loan programs for both funeral home loans and golf course loans. Business Opportunity Financing to Buy a Business Business financing to buy a business opportunity is a special business loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find. Avoiding Problematic Commercial Mortgage Terms It is critical to avoid undesirable business loan terms when refinancing or buying a funeral home or golf course business. Particularly important terms involve the percentage of value for the commercial mortgage and the length of the commercial loan. Regional and local banks will frequently offer short-term business financing instead of a longer-term commercial loan. Difficulties with Stated Income Commercial Mortgage Financing Although a stated income commercial loan has a certain number of benefits in specific circumstances, the use of stated income business financing is not recommended for a funeral home loan or golf course loan. A major limitation of a stated income commercial mortgage is the maximum business loan possible. A further limitation is the low percentage of value for stated income commercial financing involving either golf course financing or funeral home financing. Business Loan Difficulties - Commercial Mortgage Loan Value and Business Value Another complicating factor for funeral home financing and golf course financing is that the business value frequently exceeds the commercial real estate value by a significant amount. This is especially true when appraising a funeral home. Some commercial lenders will provide a commercial mortgage that includes only the commercial property value, and this will result in a much smaller commercial loan. Funeral Home and Golf Course Financing - Avoid Excessive Business Loan Fees There are business lenders that are taking advantage of the limited commercial mortgage loan choices for refinancing, purchasing and building golf courses or funeral homes. Business borrowers for funeral homes and golf courses should not be concerned by reasonable and legitimate business loan fees during the early business financing process. One of the unnecessary and unacceptable lending tactics involves excessive fees (generally more than $20,000) even if the commercial loan is not successfully completed. Commercial Lender Options for Funeral Home Loans and Golf Course Loans As mentioned earlier, the supply of acceptable business lenders for this kind of business financing has been reduced. An agreeable commercial mortgage for a golf course loan or a funeral home loan will depend upon a wise lender choice. The practical reality is that a commercial borrower should be prepared for the limited choices of truly qualified lenders for a business loan to buy a business involving funeral homes or golf courses. It becomes essential to choose a lender with the capability to successfully complete the required commercial loan process and simultaneously avoid the business financing problems described above. Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.
Article Source: http://www.financemanual.com
About the author: S.A. Bush provides candid church loan financing - commercial financing advice. Free series of Business Financing reports Don't reprint the same version as everyone else. Get your own unique content business loan article here.
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