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