If you are trying to get any business up and running, the one thing you simply cannot do without is money or rather commercial financing in this instance. So you might be asking yourself, at this point, where exactly do you even start?
Whether you are trying to secure business purpose loans for a larger start-up or trying to get your small business where it needs to be, you can always benefit from a practical guide to all things business. So, let’s quickly cover a few of the basics. For starters, business purpose loans may or may not be your solutions to your financing problem. In other words, business purpose loans typically involve using the equity in one’s home as collateral.
If you are wondering why you need collateral or should consider using your house as collateral the answer is very simple—collateral makes it much easier to not only get approved for your loan but to secure a loan option that might otherwise be out of reach without said collateral. Generally, business owners that choose this particular commercial loan do so because who in their right mind doesn’t like lower interest and quick approvals?
Thus, if you have the ability to move forward on a potential commercial loan with the equity in your home then it almost goes without say that you need to make sure you are leveraging your collateral with your best interest in mind. This means keeping detail records of assets and being clear on the true value of assets or collateral i.e. do not guestimate. You would be surprised how many bright-eyed entrepreneurs rely on outdated information. Do not be one of those entrepreneurs instead do yourself a favor and contact an appraiser for an accurate as well as an up-to-date record of your property’s value.
Now, that you have a rough idea of what and why collateral matters with these particular kinds of loans, let’s go over you next move when you simply do not have enough collateral or rather not enough equity in your home. In the event that you cannot get approved with your current collateral, you need to start thinking creatively. This means finding exactly what your other lender options are, researching online lending, comparing your offers, thoroughly vetting your potential lenders and so on. Ultimately, the goal is to get the right kind of financing for your needs, therefore you should never let a lack of collateral or equity stop you from accomplishing your goals.
By now you know that more research you do, the better you under the risks and the better prepared you are to pitch your plans to your potential lenders, the better off you will be in the long run. Moreover, you do not have to do any of this alone and more importantly, you shouldn’t so use all the resources at your disposal. The truth is starting a business or expanding a business is never easy and you need to stay on your toes every step of the way.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.