Here’s the real deal: bad credit can make getting a loan challenging, but not impossible. It’s important to understand that few people have perfect credit. So if you’re feeling like you’re the only one who has a few credit dings under his belt, you’re not alone. But you’re most certainly not. Lots of people have bad credit and still get approved for commercial loans.
Before you apply for a loan, it’s important to try to get your credit in the best state possible. Get your most up to date score, then make some changes to repair your credit such as making sure you make payments on time and not maxing out your credit limit. You can even rebuild your credit by purchasing a home and making your mortgage payments on time. A year of monthly on time payments can boost your score. Meanwhile, as you build you credit but you still need commercial loans, here are some tips to get your best eligibility chances of getting approved.
Decide what type of loan you need. There are traditional long-term loans that typically can be obtained through a conventional lending institution like a bank. However, in the case of these loans, high credit scores and clean credit history is very important. The good news is that short-term loans are another option via alternative lenders. Short-term home lenders typically don’t scrutinize credit score as much as banks do for long-term loans.
Short-term loans for commercial loans have many benefits besides the fact that lenders typically don’t just look at your credit score to determine whether or not you will qualify or that they want to take the risk to invest in you. Short-term loans are beneficial because they are typically easier to obtain than traditional loans and there is often less red tape and paperwork. With short-term loans, the repayment structure is between one and three years, so you’re not stuck in a repayment schedule for a lengthy period of time. Another benefit is that you get cash in hand quickly.
As with any “pro,” there is a “con.” Though with short-terms the pros usually outweigh the cons, you should still be aware of the latter. There are typically high interest rates associated with short-term loans. Also, alternative lenders can sometimes have a reputation of nor being scrupulous, so be sure to do your homework and make sure the lender you work with is appropriately licensed. Before you prepare to obtain a loan, take your time to repair your credit score to put yourself in the best position to be accepted to the best loan possible.
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.
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