There are some important steps when it comes to starting a new business and one of them is applying for commercial loans. First, you need to understand what commercial lending is. It is the process of providing a business with funding that enables a company to finance the business for many reasons. The extra funds can be used to open a business, expand a business or even remodel. There can be many reasons to obtain extra funding.
Banks are not the only source for extra funding. Commercial loans are actually available from a number of sources as well that can range from the local credit unions, mutual savings companies and private lenders, just to name a few. Keep in mind that there are always plenty of options to choose from and always select one that works best for you and your business.
Even though you have options, you have to remember that each of the different sources have their own guidelines that need to be followed. This is why it is important to always evaluate all of the information and that loan application, which includes the ability to repay the loan. If you are looking for a riskier loan, you will be looking at higher interest rates. But still make sure to do your research and look for the best offers.
Not everyone is an expert when it comes to the commercial lending process. That is why it is crucial to educate yourself and be familiar with the terms and language used by lenders so that there are no surprises down the line, especially when it comes to extra fees. The origination fee is the fee that is based on the amount and is charged during closing. Maturity is the term used for the final payment date of a loan, which is when all of the outstanding principal and interest is due. Amortization is the repayment of the loan in consistent and monthly installments. The interest is usually paid first, before the principal balance decreases. This is when you can choose to schedule how much you pay in interest and principal each month. The pre-payment penalty fee is charged by some lenders for paying the amount of the loan balance before the maturity date.
There is so much to learn about the entire lending process, but if you are familiar with some of the most used and popular loan terms, especially the extra fees that can come along with a loan, then you are always ahead of the game and will be able to avoid any extra surprises.
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.