Seeking the counsel of a commercial lender for your business loan is like having a coach in your corner. They are there to help you and can make the process easier, smoother and negotiate a better loan than if you go it alone.

As a business owner, you are smart and savvy. So you may think you can go it alone when seeking financial lending. You may have heard things about lenders that make you a bit weary. However, today’s professional commercial lender is not like the stereotypical one you may be thinking about in your head. They are here to help you become eligible for the best loan, with the best rates and terms – because it’s a win-win solution for you… and them.

You definitely want to make sure you the professional you are working with shows interest in truly finding you an affordable interest rate, which is important. However, there are other aspects of the loan that you want to look at to ensure you are getting the best deal. These lenders know how to negotiate private money and hard money loans, and determining the best type of loan for you. But you also have to take some responsibility for making sure you are getting the best rates and terms. So be prepared to negotiate on your own behalf in addition to your commercial lender.

When it comes to negotiating your loan your interest rate is a big factor. You want to make sure you can agree upon terms rates that you feel comfortable with and that you will be able to pay back. You also want to make sure you ask about a default interest rate – that is just as significant as the regular interest rate. The default interest rate increases if you are in breach of your loan agreement at any point over the course of the term. You also want to talk points – those are the fees that you are going to have to pay in addition to the loan, such as closing costs.

Beyond these, there “hidden” fees that you might not have first considered. You will want to make sure you negotiate underwriting fees, foreclosure fees, late fees, referral fees (if that applies) and renewal fees, which are the costs associated with renewing your loan for an additional term. Ask your lender if there are any other fees that you are responsible for and see what you can negotiate as far as those.

Loan serving is another fee that you may need to negotiate.

Your commercial lender may be able to cover this fee, so try to negotiate that. However, there may be a third party that handles the loan servicing. Make sure you know who is going to be the one handling this fee. You might not have to cover it, but make sure it’s clear who will be paying it before you sign on the dotted line so you aren’t caught off guard by addition fees later on.

Take precautions to cover yourself and make sure you get the best loan term for your business.

There is a lot to negotiate when it comes to obtaining a commercial loan. The more you know beforehand, and the more prepared you are, the better you can be at taking the upper hand when it comes to negotiating a great loan term for your company.

Dennis Dahlberg
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177 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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