Business Loan Solutions – Commercial Mortgage Loan Strategies

Commercial borrowers are likely to be confused when they are turned down and will probably 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 mortgage, a practical strategy is provided for converting the declined commercial mortgage loan into an approved business loan.

Two of the reasons (business plans and tax returns) will potentially impact all commercial borrowers. Many commercial mortgage loan officers will start their business loan review by stating some variation of “Can you show me your business plan?” and “We will need to see several years of tax returns.”

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 the business owner to be declined for a commercial mortgage loan by a traditional commercial lender.

The reasons provided below represent commonly-found issues. It is likely that several of the reasons will be relevant for most business loan scenarios.

Commercial Mortgage Rejections: (1) Special Purpose Properties

Reason Number One for business loan rejections: The lender does not make commercial mortgage loans for the type of business financing involved or imposes special covenants that make the commercial real estate loan difficult for the business owner. In a typical example, fewer commercial banks are offering business financing for bar and restaurant properties.

Similarly, auto service businesses are frequently given unnecessary (and expensive) environmental reporting requirements. There are many “special purpose” properties such as funeral homes, campgrounds and churches that most traditional banks will not include in their business lending portfolio.

Strategy Number One for converting the rejected commercial real estate loan into an approved business loan: For most commercial borrowers, there are viable commercial mortgage options beyond traditional commercial lender choices.

There are action-oriented non-traditional commercial lenders that will offer commercial mortgage loans for most special purpose commercial property situations. The best business financing could be available only from a non-traditional lender when a traditional lender won’t provide the necessary commercial real estate loan.

Commercial Mortgage Rejections: (2) Tax Returns

Reason Number Two for business loan rejections: A loan underwriter finds an issue on tax returns that disqualifies a business borrower under the bank’s lending standards. This “issue” will often be inadequate net income, but when commercial loan underwriters analyze income tax returns, there can be a wide variety of other possibilities which produce the same disapproval.

Strategy Number Two for converting the rejected commercial real estate loan into an approved business loan: Commercial borrowers will never have this reason to worry about if they have applied for a “Stated Income” commercial mortgage loan. Very few traditional lenders use a Stated Income process (no income verification, no tax returns, no IRS Form 4506) for a commercial loan.

Business borrowers should look for lenders using Stated Income business loans. This approach, however, will not work for all commercial loans due to a prevailing maximum loan of $3 million for typical Stated Income commercial mortgage situations.

Commercial Mortgage Rejections: (3) Cash Out Limitations

Reason Number Three for commercial mortgage loan and business loan disapprovals: When a business attempts to refinance their commercial property loan and wants to get significant cash out, it is normal for a traditional bank to restrict what the funds are used for and to severely limit the amount of cash received. Even though the bank is willing to make the commercial loan, if they won’t provide the cash required by the commercial borrower, this is similar to rejecting the loan.

Strategy Number Three for converting the declined commercial mortgage into an approved commercial real estate loan: As mentioned above, there are other commercial lending options available. The commercial borrower’s mission (and it is not impossible at all) is to use a commercial real estate lender that will allow them to get much larger amounts of cash out of a commercial refinancing without restrictions on what they do with it.

Commercial Mortgage Rejections: (4) Collateral Required

Reason Number Four for business loan rejections: The bank will not approve a commercial mortgage loan without collateral, typically as a lien on the commercial borrower’s personal residence or other personal assets.

Strategy Number Four for converting the rejected commercial real estate loan into an approved business loan: Commercial mortgage borrowers should seek out business lenders that do not cross collateralize assets as a requirement for receiving a commercial loan. This will provide more options for the borrower and eliminate unnecessary and unwise connections between personal and commercial assets.

Commercial Mortgage Rejections: (5) Business Plan Requirements

Reason Number Five for commercial mortgage loan and business loan disapprovals: A bank’s loan officer determines that the business plan does not support the needed commercial loan.

Strategy Number Five for converting the rejected commercial real estate loan into an approved business loan: Business borrowers should experience fewer delays and profit from dealing with a commercial lender that does not have a business plan requirement due to several key benefits:

(A) 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.

(B) Shorten the business financing closing period. Business plan preparation is likely to take 1-2 months or more.

(C) If a professional business plan is not needed, an approval for the business financing requires one less item.

Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.

Simple Accounting Training- Free Useful Guideline About Cost Accounting Basics

As you devour this article, remember that the rest of it contains valuable information related to simple accounting training and in some way related to 2007 IRA catch up, construction business software, and fact accounting software or financial and managerial accounting for your reading pleasure.

The General Ledger Creates an Audit Trail, Dont let the word audit strike fear in your heart; I am not talking about a tax audit. Although, if you are called to respond to an outside audit for any reason, a well-maintained general ledger is essential.

If you find it difficult to determine someone’s expertise in a field with which you are unfamiliar, here are some solutions, Have them interviewed by an expert. Your own CPA will probably be glad to interview a few for you, carefully check references from past jobs. Ask detailed questions on exactly what they did in the accounting function. Compare the answers with what they say they did, ask them some accounting questions. It may sound odd that you (of all people) should be asking such questions. However, even if you can’t judge the technical merit of the answers, you can get a feel for how comfortable they are with the subject and the authority with which they answer.

We segregate liabilities into short-term and long-term categories on the balance sheet. This division is nothing more than separating those liabilities scheduled for payment within the next accounting period (usually the next twelve months) from those not to be paid until later. We often separate debt like this, it gives readers a clearer picture of how much the company owes and when.

Don’t forget that you are only a step away from getting more information about simple accounting training or such related information by searching the search engines online Google Dot Com alone can give you more than enough results when you search for simple accounting training.

Amortization, In the course of doing business, you will likely acquire what are known as intangible assets. These assets can contribute to the revenue growth of your business and, as such, they can be expensed against these future revenues. An example of an intangible asset is when you buy a patent for an invention.

Last in/first out, this method, commonly referred to as LIFO, is based on the assumption that the most recent units purchased will be the first units sold. A “widget” is an imaginary item that could be just about any product. The advantage of last in, first out accounting, or LIFO, is that typically the last widgets purchased were purchased at the highest price and that by considering the highest priced items to be sold first, a business can reduce its short-term profit, and hence, taxes.

Accountants and auditors help to ensure that the Nations firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They analyze and communicate financial information for various entities such as companies, individual clients, and government. Beyond carrying out the fundamental tasks of the occupationpreparing, analyzing, and verifying financial documents in order to provide information to clientsmany accountants also offer budget analysis, financial and investment planning, information technology consulting, and limited legal services. Specific job duties vary widely among the four major fields of accounting and auditing: public, management, government accounting, and internal auditing.

We discovered that many people who were also searching for information related to simple accounting training also searched online for related information such as accounting software reseller, debit credit double entry, and even accounting standard.

Mortgage Scams Lead to Debt And Harassment

The Federal Trade Commission has stepped up its investigations and prosecutions of mortgage relief scam artists. Since the start of 2013, the FTC has obtained settlements from over 20 individuals and companies involved with scamming distressed homeowners. In the most recent cases, two individuals and seven companies settled FTC charges that they victimized more than a thousand people through “mass joinder lawsuits” and “forensic loan audits.” They violated the Mortgage Assistance Relief Services (MARS) Rule, which was set up to curb deceptive and unfair practices related to such services.

The FTC contends that Sameer Lakhany, Brian Pacios, Precision Law Center, Inc., Precision Law Center LLC, National Legal Network, Inc., and Assurity Law Group, Inc. targeted consumers with a mass joinder scam. They promised homeowners that they could stop their foreclosures or obtain some other mortgage relief if they joined together to sue the lenders. The defendants represented themselves as a law firm called Precision Law Center, charging between $6,000 and $10,000 in up-front fees. But every suit was dismissed soon after it was filed; the victims saw none of the promised relief.

One of the scam artists, Lakhany, was also involved in a “forensic loan audit” scam, along with The Credit Shop, LLC, Titanium Realty, Inc., and Fidelity Legal Services LLC. These defendants called themselves nonprofit organizations, with domain names like “FreeFedLoanMod.org,” “HouseholdRelief.org,” and “MyHomeSupport.org;” but really they sold people an auditing service, which supposedly found lender violations in mortgage documents. The defendants charged $800 to nearly $1,600 for this service, which never led to a single favorable loan modification for the victims.

The FTC settlements require the defendants to surrender many assets and pay $4.75 million in restitution. All except Assurity Law Group, Inc. are banned from mortgage relief and debt relief services; Assurity is required to surrender $100,000 in funds and has been ordered to cease any deceptive practices. In February, the FTC settled with another predatory group, composed of Ryan Zimmerman, Consumer Advocates Group Experts, LLC, Paramount Asset Management Corporation, and Advocates for Consumer Affairs Expert, LLC. These entities also used the forensic loan audit scam, and charged people almost $2,000 or more for the audits-they failed to make good on their false claims. Besides receiving a $3.5 million judgment against them, the defendants are banned from marketing relief services or products, and from making any misleading claims about any other type of product or service.

In January 2013, eight other defendants settled with the FTC, for selling fake relief services to distressed Spanish-speaking homeowners over the phone. The defendants-David F. Preiner, Daniel Hungria, Freedom Companies Marketing, Inc., Freedom Companies Lending, Inc., Freedom Companies, Inc., Grupo Marketing Dominicana, Freedom Information Services, Inc., and Haiti Management, Inc-collected over $2 million from people over three years. They simply didn’t provide the services they said they could. Part of this settlement, in which the defendants received a $2.39 million judgment, bans them from marketing relief products or services, and from making misleading claims about anything they advertise.