| Your commercial property loan is turned | | | | it approves a bigger one, especially |
| down - Why?? It is particularly tough to | | | | with the sub prime catastrophe that |
| get an investment property mortgage | | | | we're seeing today. A bad loan for lots |
| loan, and you will often find yourself | | | | of money is not good for the lender or |
| rejected for no clear reason. This can | | | | the borrower. |
| be frustrating, but it is a learning | | | | When you are working out your business |
| experience. With each terrible | | | | plan, be realistic about how much you |
| rejection, you get a little wiser. | | | | need, and how much you are able to pay |
| Well, what if you could skip all of | | | | back. It's nice to have more than enough |
| those rejections and learn from others' | | | | money to start your business, but it's |
| mistakes? Let's look at the most common | | | | not so nice when you are struggling to |
| reasons why investment property mortgage | | | | pay the bills and have that giant debt |
| loans get turned down. Then, you will | | | | hanging over your head. Ask for just as |
| know what to expect when you apply for | | | | much as you need, and don't aim too |
| your financing. | | | | high. |
| The Type of Business | | | | The Source of Funding |
| The most common reason that loan | | | | Most traditional lenders will want to |
| applications are rejected is that the | | | | know detailed information about where |
| bank simply does not offer financing to | | | | the funds are coming from to make the |
| certain kinds of businesses. Banks loan | | | | down-payment. This is a reasonable |
| money on the basis of possible risk, and | | | | request, but it can get those of us |
| some business types are considered | | | | seeking a loan into trouble. The reason |
| riskier than others. If you are trying | | | | why this can be problematic is that they |
| to get financing for a golf course, | | | | may consider the source a high risk. |
| restaurant, gas station or church, you | | | | Remember, they're not as optimistic |
| might find it tricky to get funding. On | | | | about your business as you are! |
| the other hand, if you are looking for | | | | Many businesses finance their down |
| funding for an apartment complex or | | | | payment by using funds from what is |
| office building, it will be much easier. | | | | called "subordinated debt." This |
| What is your solution? Look for a lender | | | | basically means some kind of secondary |
| that specializes in that particular type | | | | financing, like a seller second. Banks |
| of business. On the Internet, there are | | | | and other traditional lenders don't like |
| all sorts of financing company options | | | | to see this. A non-traditional lender |
| available. Also, look for | | | | will be much more likely to approve a |
| non-traditional lenders who may be more | | | | loan that uses secondary financing as a |
| likely to take on what they consider | | | | down payment. |
| riskier ventures. | | | | Finally, remember that we all get |
| Don't Ask For Too Much! | | | | rejected! Probably everyone you know who |
| A big problem that causes many | | | | has started a small business has been |
| rejections is that borrowers simply ask | | | | turned down at least once, and most |
| for too much money. A bank is always | | | | likely many more times than that. |
| ready to approve a smaller loan before | | | | |