Business Loan and Commercial Mortgage Loan Alternate Strategies

It is important for commercial borrowers to understand that they have more business loan choices than they are likely to realize. I refer to these commercial mortgage choices as "Thinking Outside the Bank" because the average commercial borrower probably believes that a traditional bank is the best source for a business loan. Non-traditional commercial lenders are increasingly considered to have the competitive edge for a number of commercial mortgage 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 noted in an earlier commercial mortgage article, in many non-competitive business loan situations it is not unusual for a local traditional bank to impose harsher business financing terms than would commonly be seen in a more competitive commercial loan market. Such traditional banks routinely take advantage of a relative lack of other commercial lenders in their local market.

An effective response by borrowers is to emphasize business financing options other than the traditional ones. It is not wise for business borrowers to depend only upon local banks for commercial loan possibilities. For common commercial financing circumstances, a non-local business lender can frequently provide the best business loan terms because of competition with other business lenders.

There are three business loan scenarios in which borrowers will commonly discover that non-traditional lenders will offer terms that are better for the business owner: (1) commercial real estate financing programs; (2) working capital business loan programs; and (3) business management programs for credit card processing.

Business Loan Options - Commercial Mortgage Loan Programs

Two of the worst commercial real estate financing problems for business owners can be eliminated by "Thinking Outside the Bank". The first commercial mortgage business loan problem is the typical bank practice to eliminate most special purpose business properties (such as golf courses and funeral homes) from their lending portfolio.

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.

Business Loan Options - Business Cash Advance Programs

Business owners that accept credit cards will frequently qualify for a working capital business loan via credit card financing. Traditional lenders will often be very poor candidates to consider if a business needs help with a business cash advance.

Because even the most successful merchants usually need more financial resources than they can get from a conventional commercial business loan, it is essential for a business to "Think Outside the Bank" and find non-traditional lenders to coordinate this commercial financing requirement.

Business Loan Options - Credit Card Processing Programs

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 loan observation: I have written another business financing article about avoiding certain commercial lenders. I want to stress that there are both non-traditional and traditional lenders which should be bypassed.

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.

Contact S.A. Bush at Church Loan - Commercial Loan Solutions for unique and straightforward commercial mortgage - church financing advice
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