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1page_img1Brick-and-mortar retail stores are closing at record rates leaving traditional lenders placing this segment of commercial loans in the high-risk category. There are other options for small business owners and one of those is private hard money lenders.

With the latest generations turning to online shopping and the mammoth that has become Amazon all too willing to supply their needs, brick-and-mortar retail chains are closing by the thousands. In our present omnichannel world, store closures can simply mean a change of direction and a company becoming more online-oriented. Yet, for many companies, it appears that they did not convert soon enough and their demise is evident in the empty shopping malls that are littering America.

Some of the big players that have been affected include Barnes and Noble, Macy’s, Nordstrom and Sport’s Authority. Announced store closures in 2017 are climbing to more than 5,000. Just a few of the ones shutting down some of their stores include RadioShack, Payless, Wet Seal, Crocs, Staples and CVS. With the disruption occurring in retail, what are the chances of a new business joining the fray or an existing one obtaining a commercial loan for seasonal use or to increase inventory? Very slim. Banks consider retail a high risk when it comes to loans. And the Small Business Administration (SBA), the once turned to commercial loan option for small business, is denying approximately 85 percent of those looking for capital. Unless you have great credit, plenty of assets, and time on your hands—an SBA loan will probably not be in your future.

The role that banking plays in lending is a mere shadow of its former self prior to the subprime mortgage crisis and the Great Recession. Since that time, there has been a 20 percent decline in small-business lending. If you’re a small business owner and you experience rejection when applying for a loan, take heart that you’re not alone—80 percent of small business owners who apply for a loan are denied. So where does that leave retailers in need of capital? Many are turning to private money lenders.

How to Fund your Small Business with a Hard Money Commercial Loan

Private hard money lenders are asset-based lenders. They are not as concerned about your creditworthiness or credit score as they are about the collateral your business or personal asset provides. They have fewer requirements for funding approval, but they are investors who do want to see a return on their money. Leveraging your real estate in order to obtain quick capital can keep your business going in downturns and help maintain your inventory in upswings. You will, however, need to have a payback strategy. Are you awaiting payables? Do you have massive orders just waiting for product? Do you need equipment in order to notch it up to the next level of success? In most cases, they will cap borrowing amounts to about 70 percent of the amount of your asset. In other words, if the real estate that you’re using as an asset is worth $100,000, you would be able to obtain approximately $70,000.

Private hard money lenders use collateral to secure your loan.
Private hard money lenders can help small businesses, including retailers, support their operations when sales are down and increase their supplies when demand is high. At Level 4 Funding, we work with a large network or reputable investors and know which ones are interested in your type of business. Many individuals have developed relations with Level 4 Funding, turning to it time and again for small business loans.

mark-gowlovech-150x150Dennis 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

Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701   

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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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