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Home Commercial Loan Information
Commercial Loan Information
Facts about Commercial Loans PDF Print E-mail

commercial loan funds are available for qualified borrowers

Commercial loans are more difficult to get today as a result of the recent financial crisis. The fact is however, there is no shortage of money available, and loans can be obtained for good projects and qualified borrowers that have a low risk of default. The lenders want to make sure the borrowers are able to repay the loans and have sufficient resources to back the loan with collateral. Obviously there will always be some amount of risk for every loan. World Net Capital I will carefully review your loan request and the information you submit to determine our lender’s risk of losing their money if they lend it to you. The bottom line is that the lenders do not want to lose their money.

 

Many banks and other financial institutions experienced huge losses during the recent recession. As a result, borrowers now have to meet a higher qualification standard than before the recession. Your credit rating and history have to be as good as or better than before, and the amount you can borrow as a percentage of the property value (LTV) has decreased. In other words, you need to have a good credit score and more down payment. However a positive thing that happened is interest rates are lower now than they have been in a long time and lenders are anxious to make loans to those who qualify. So mortgage payments will be lower for businesses that do qualify for a commercial loan.

 

Who is lending money in today’s market? Financial institutions that are providing loans today include, generally in order from lowest to highest interest rates: life insurance companies, conduits, banks, savings banks and savings and loan associations, credit unions, mortgage REIT's, and hard money lenders. The interest rates, loan terms, qualification requirements, eligible property types, and loan amounts vary considerable from one type of lender to another. Lenders that offer the lowest interest rates also have the toughest qualification standards. Getting a loan from an insurance company is usually the most difficult and they have strict requirements, but they can offer the lowest rates to those that can quality.

 

Commercial banks provide relatively good interest rates and make the largest number of new commercial business/real estate loans today. Banks have been making at least 75% of new commercial loans. Commercial banks generally offer a wide range of loan amounts, loan rates, and loan terms. The borrower has to be credit worthy and have the resources to repay the loan, including collateral and a good cash flow. World Net Capital I primarily gets funds from commercial banks. Savings banks and savings and loan associations (thrifts) are making very few commercial business loans today.

Last Updated on Wednesday, 11 September 2013 16:38
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