To grow any business to the next level, it’s important to have the financial backing in place to be order to afford expenditures of expansion. Short term commercial real estate financing can take your company to next level but first you’ll need to understand what will be required of you to make sure you are eligible for this type of loan.

Short term commercial real estate financing can be just the solution to the problem of coming up short on cash. Unlike conventional financing options that have five or ten year repayment terms, the repayment schedule of a short term is typically much shorter — likely between three and six months. This type of financing is also usually approved easier than traditional long-term loans and the payment restructure can be made in not only smaller, but also more frequent payments – whether daily or weekly – versus a monthly lump sum. When securing this type of financing its important to figure into your budget the repayment.

Another “pro” of short term commercial real estate financing is that you can get the cash you need relatively fast. This is important when your company is in a tight spot and it’s also a good way for new companies to establish some business credit, which can be beneficial, and help them improve their chances of getting approved, if they need to apply for a larger conventional long-term loan later on. The ability to show a lender that you have had, and paid off, previously loans, helps your eligibility.

Short term financing is great for new companies and businesses with not so great credit history that are working on rebuilding their credit scores. These types of loan application processes don’t typically require a high minimum credit score for approval, which conventional lenders and banks usually do. However, if you are able to get approved for this type of loan and are able to restore your credit score by repaying the loan as outlined in the loan agreement, this can make other loan applications you may apply for later on look more desirable.

With short term commercial real estate financing, you don’t have to wait too long to get the money you need.

After applying for the loan, going through any additional necessary steps of approval, and finally, actually getting approved, you can receive the cash in as little as a day. For companies that are really in need of cash very quickly, this type of loan can really save the day!

As with any upside, there are some downsides, too. There are a few “cons” that are involved with this type of short term financing.

While these loans can be very helpful for new businesses and companies that are experiencing some growing pains and need cash fast, there are a few things to be aware of. These loans are associated with much higher percentage rates of these than the average APR associated with conventional long term financing. This is because the repayment window is much shorter. The APR is higher comparative to the length of the loan schedule, usually between three and six months. To estimate and convert the APR, add the finance charge plus the interest rate. Typically, lender fees will also be required for this type of financing.

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.

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