This is really a bad news when our commercial loan applications are rejected by the banks.And this article will analyse the reasons and give you a strategy.
Commercial projects are frequently too unique for traditional commercial banks. In these situations (even if a commercial borrower has favorable tax returns and an adequate business plan), it is not unusual for commercial borrowers to be declined for a commercial loan by a traditional commercial lender. Commercial borrowers are likely to be confused when they are turned down and will be unsure as to why it happened and what to do next. For each of the five major reasons that a bank might decline a commercial loan, a practical strategy is provided for converting the declined commercial loan into an approved commercial loan.
REASON # 1 FOR COMMERCIAL LOAN REJECTIONS
A bank’s loan officer or loan underwriter is not satisfied that the business plan provided by the commercial borrower supports the requested loan.
STRATEGY # 1 FOR CONVERTING THE DECLINED COMMERCIAL LOAN INTO AN APPROVED COMMERCIAL LOAN
Most commercial borrowers will benefit directly from dealing with a commercial lender that does not require a business plan due to the following major benefits:
(1) Reduce commercial loan costs by thousands of dollars. A common range for an average business plan (prepared to typical bank specifications) is $5,000 to $10,000.
(2) Reduce commercial loan closing time by several months. Business plans can be prepared before or after applying for a commercial loan, but either way the net extra time required will probably be 1-2 months or more.
(3) If the lender does not require a business plan, there is one less item standing between the commercial borrower and their approved loan.
REASON # 2 FOR COMMERCIAL LOAN REJECTIONS Read the rest of this entry »
