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 commercial mortgage borrowers will probably feel that a bank is their only source for a business loan. However, since banks traditionally focus on a few established industries, non-bank commercial lenders should be reviewed for most commercial loan scenarios. Therefore the recommended business financing strategy described in this article is to “Think Outside the Bank”.

As I reported in a previous business loan discussion, in many commercial mortgage situations it is common for a local bank to assess stricter commercial loan conditions than would typically be seen in a competitive business financing scenario. Such banks can often take advantage if there are few business lenders in their market.

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 several business financing situations in which commercial borrowers will frequently find that non-traditional commercial lenders are better positioned to provide terms that are more advantageous to the commercial borrower: (1) commercial real estate loan programs; (2) business cash advance and credit card financing programs; and (3) credit card processing programs.

Business Financing Programs - Commercial Mortgage Alternatives

Two of the most prevalent commercial real estate loan obstacles can be precluded with a “Think Outside the Bank” mentality by businesses. The first commercial mortgage obstacle is the common practice of most banks to decline business financing for special purpose commercial properties such as churches and golf courses.

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.

Commercial Loan Choices - Merchant Cash Advance and Working Capital Loan Programs

Many merchants that accept credit cards in their business will qualify for a merchant cash advance with credit card factoring. A traditional bank will usually be a poor source of help if a business needs to use credit card financing.

Because even thriving businesses frequently need more cash than they can borrow from a bank, it can be of critical importance for a business to “Think Outside the Bank” and locate non-traditional lenders to assist with this business financing need.

Credit Card Processing Programs - Working Capital Management Choices

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 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 commercial financing comment: I have published a previous commercial loan report about business lenders to avoid. I want to emphasize that there are traditional and non-bank lenders which should be circumvented.

Because of this, when commercial borrowers “Think Outside the Bank”, they must be prepared to anticipate some ineffective non-traditional commercial lenders in their attempt to find better commercial financing involving credit card processing management, commercial mortgage loans and business cash advance programs.