Commercial Mortgage and Working Capital Business Loan Choices

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.

A bank might offer to provide business financing but require overly stringent terms. In other cases a traditional bank will decline the commercial loan because they do not provide commercial mortgage loans to the commercial borrower's business category. For both examples, a commercial borrower will benefit by "Thinking Outside the Bank".

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.

An appropriate response by commercial borrowers is to seek out non-bank business loan options. It is neither necessary nor wise for commercial borrowers to depend only upon local traditional banks for business financing solutions. For most commercial mortgage situations, a non-local and non-bank commercial lender is likely to provide improved commercial loan terms because they are accustomed to competing aggressively with other commercial 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.

Commercial Loan Programs - Commercial Mortgage Business Loan Choices

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.

A second business loan possibility is the frequent practice of many commercial banks to add recall and balloon conditions to their commercial loans. The bank can then require early payoff of the commercial real estate loan under stipulated conditions. Both commercial financing situations can easily be prevented by a non-traditional lending source.

Working Capital Business Loan and Business Cash Advance Programs - Business Financing Alternatives

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.

Commercial Loan Alternatives - Programs for Credit Card Processing Management

A credit card processing service can be a key function in improving the bottom line of merchants with high volume credit card activity. The analysis of credit card processing providers can be efficiently combined with credit card receivables and credit card financing.

In managing a merchant cash advance program, it is often possible to obtain a significant improvement in credit card processing activities. It is probable that a non-traditional lender will be the key source of effective help with credit card processing because traditional banks are usually not competitive in providing assistance with credit card financing.

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.

So when commercial borrowers "Think Outside the Bank", it is still of critical importance that they are prepared to avoid a wide variety of problematic non-traditional commercial lenders in their search for viable business financing, especially when it involves business cash advance (credit card receivables and credit card factoring) programs, credit card processing services and commercial real estate financing.

***By: Stephen A. Bush