Individuals will often want to consider alternative employment and develop new income sources in a troubled economy such as we are currently experiencing. A business opportunity is one of the investment choices which should be analyzed. The purchase of existing businesses with established cash flow is the focus of this article, but this often refers to a variety of business structures.

     Purchasing a business opportunity involves several potential commercial financing obstacles (even with current cash flow) because commercial property is not included as collateral for the lender. When faced with this realization, borrowers should be prepared to seek commercial loan and working capital help to buy a business or refinance a business without commercial property.

     A commercial borrower might not always need commercial finance assistance because they are using cash to purchase a business, but there are still special challenges to anticipate. A few of the other critical issues include working capital for operating the business, likely timing for a future sale of the business and business valuation.

     It might be feasible to purchase commercial property along with the business in some instances. This alternative financing approach should be evaluated thoroughly because investment property financing options are often more flexible than a business opportunity loan without real estate as collateral. Read the rest of this entry »

Tags: Commercial

     Avoiding malpractice with lenders and brokers for business loans is becoming more difficult as well as increasingly important. The time, cost and effort required to accomplish this are certainly justified in light of the potentially devastating costs of ignoring the issue when obtaining commercial loans.

     During the opening segment of the television series Hill Street Blues, Sergeant Phil Esterhaus usually ended with a suggestion (let’s be careful out there) that will also be helpful in avoiding malpractice situations involving working capital financing. Although that is a worthy goal, the actual practice of avoiding problems with business loans is somewhat difficult and complex. One of our most effective solutions for this dilemma has been to openly acknowledge that such difficulties exist and simultaneously provide detailed advice and strategies.

     We published a special report addressing one of the biggest recent causes of malpractice involving business financing and commercial real estate loans.

     Most commercial borrowers are probably aware that chaotic conditions started impacting residential real estate beginning about a year ago. This has produced problems for commercial borrowers since it has resulted in numerous former residential lenders and brokers now attempting to execute business loans because their previous residential lending activities have all but dried up.

     Inexperience involving commercial loans is never a good thing when you are describing a commercial lender or broker. What borrowers need to be acutely aware of is that inexperience coupled with the complexity of business loans is likely to result in a recipe for malpractice in almost all cases. Read the rest of this entry »

Tags: Commercial