Helpful Tips When Applying for Commercial Loan Financing

Seeking commercial loan financing can be very stressful for even a seasoned business owner. But having a few tips in mind as you prepare can help to reduce your stress level and improve your appeal to lenders.

Regardless of the industry that you are in, seeking commercial loan financing is going to force you to enter the deep end of the finance world. All commercial loans are scrutinized much more closely that personal loans and the process is longer and more arduous. But having a few tips in mind as you prepare for the process can help you to be better prepared which will speed up the process and allow you to refocus on your daily business and move forward with your purchase more quickly.

Because of the large dollar amount of many commercial loans and the higher risk in commercial loan financing due to financial volatility, the amount of paperwork required for a loan application is rather large. As a rule you can assume that you will need to provide at least three to five years of budgetary information, tax statements and also financial assessments for your business. If the business is less than three years old, it is also likely that you will need to provide personal financial and tax documentation for the past several years. Organizing this large pile of data can take some time. It is wise to dedicate yourself to preparing this standard document package prior to contacting any lenders. Presenting a professional looking packet that is well organized and complete will demonstrate professionalism and attention to detail to potential lenders. And having the document prepared will reduce your stress knowing that the arduous task if completed.

Pick the Right Time to Apply

Most businesses operate on a cyclic nature. It is not uncommon to have predictably slower times. Understand that your past three to five years of financials will verify the cycle. But also know that it is important to demonstrate that you have the funds available to weather any upcoming slow period. Building cash reserves and reducing spending prior to a slow period will show lenders that you have a reliable plan in place to allow you to make you payments and meet your commitment for any commercial loan financing that you are requesting.

Be a Boy Scout

It might sound very cliché or over simplified but be prepared. Not only will this show potential lenders how serious you are about getting a loan but it will also show professionalism. Lenders are looking for these small indications of how you handle a new process or a stressful situation to demonstrate your personal and business character. In addition, having materials prepared, understanding the application process and knowing the terms of the loan that you are requesting will provide you with confidence and peace of mind. The application process can take a month or more but knowing that you were well prepared will allow you to return focus on running your business and not worrying about the processing of your loan application.

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.