As you begin your research on commercial lending Texas you will find that you have several options. The one option that business owners are most interested in is a loan through the Small Business Administration. The SBA is not the actual lender but they do work with a group of lenders to offer some exceptional benefits and terms for an SBA loan. The biggest benefit is that the down payments required on an SBA loan are normally much smaller than on a conventional loan. In addition, the interest rate is always fixed and also the funds can be used for building improvements. The down side is that there are loan origination fees, prepayment penalties and the owner must often provide a personal guarantee on the loan.
Conventional financing from a bank or savings and loan office is by far the most common source of commercial lending Texas. This is the process of going to your bank, completing the application process and hopefully getting approved for the loan. In most cases you can expect a conventional lender to be willing to write a loan for about 75% of the cost of the commercial property. This offers the lender added security in knowing that the property, which is the collateral for the loan, will always have a value greater than the balance of the loan. This is critical in the event that you default on the loan and the lender needs to recover its investment.
A less common known resource for commercial lending Texas is seller financing. This method was more popular when the conventional rates were in excess of 5% but there are still some buyers who use this financing option. One of the key benefits is that the seller avoids paying for the appraisal fees and the loan origination costs. In addition, there are times when the buyer is unable to get approved for a conventional loan but the seller is still willing to provide financing.
In some cases, you will be able to get a loan from a third party. This could be a hard money lender or even a family friend or relative. This is an opportunity for you to get the money that you need without paying all of the fees associated with a conventional loan. In addition, it can provide a nice return on investment for the lender. You will still need to pay some legal fees to have a good contract drawn up but the fees and the time to process the transaction will be much less than any other type of loan that you might get. Finally, if your business has been particularly successful then you might be in a position to pay cash for your property. If you have the cash reserve, you still might want to take the opportunity to finance a part of the purchase cost to establish or increase your business credit history. Knowing your options for lending resources will allow you to make the best financial decision for your short and long term goals.
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.