Finding Private Money Lenders in California

Don’t Like The Risks That Come With Many Commercial Lending Options? Then Give One Of These A Try!

How To Evaluate Your Need For Commercial Lending Assistance With Five Simple Questions

You want to expand your business so of course, you need to look into commercial lending options, but is your need as great as you think? Are you really prepared?

My name is Bill, and I own a pizza restaurant near a major university. Recently, my primary competition decided to close its doors leaving me alone to fill the pizza loving needs of all these hungry college kids. I thought to myself—what luck! Now I don’t have to run so many specials and try to undercut his prices.

Heck—maybe I should look into expanding and buying his place. If it comes with the equipment, I could have that place up and running, making pizza for these college kids and money for me pretty quick!

Five Simple Questions To Answer Before Seeking Out Commercial Lending Options

My brother-in-law is a finance guy and told me before I got the loan for my current place that I need to be able to answer five questions before talking to anyone about commercial lending. He said that any lender worth his salt would ask me these questions so I should think about my answers to them. If I can’t answer them, well—maybe I shouldn’t be getting a loan:

• How much money do I need?: Easy, right? But it isn’t as easy as just coming up with a number. To answer it properly, it requires doing homework. In this case, it required finding out how much the building owner wanted for the space and whether the equipment was included or if I needed money for that as well. There are few things worse than getting approval for a loan and then finding out it isn’t enough.

• What do you need it for?: This goes back to doing your homework. It is hard to know how much money you need if you don’t know what you need it for. In this case, since the equipment was still in the building, I just needed money for the space.

• When do you need the money, and can you make do with a percentage of it?: Some deals require a certain amount of money to get started, but others will let you get started for less and cover other expenses down the line.

• What is your personal credit history?: Lenders want to know how good you are with money. To see this, they will want to know all about your personal credit history as well as your business history. Have you always made good financial decisions or just since you opened your business?

• Why is your business a winner? Lenders want to know why you think your business is going to be a winner. They don’t want to invest in just any old venture. They want to get into something that is going to make money. If you can’t sound passionate enough to convince them your business is a winner, maybe they shouldn’t lend you anything.

Who Doesn’t Love Pizza?

In my case, I had an award-winning pizza located next to a population know for eating my product at all hours of the day. With my competition gone, I assumed there would be a vacuum that would need filling. As it turns out—there was.

However, since I did my homework before looking around for commercial lending options, I knew my competitor quit because he was making enough money. I was kicking his behind! So while there was a vacuum to fill, it wasn’t a large one. So rather than buy a second location, I got a smaller loan so I could just add on to my current place.

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.