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Home Commercial Loan Products What Type of Loan is Best?
What Type of Loan is Best? PDF Print E-mail

best commercial loanThe best commercial loan is the one that costs the least amount to get, requires the least amount of equity, has the lowest interest rate, has a long term and amortization with no balloon payment, and can be approved. The best loan for you will depend on your specific situation, including factors such as your credit history, business cash flow, equity in your business, amount of loan, business revenue, business history, and why you need the money. Many financial institutions charge upfront application fees before loan processing even begins. World Net Capital I provides commercial loans and charges no application fees.

 

A conventional commercial loan usually provides the lowest interest rates, but it may be harder for you to qualify for approval, and you generally need more equity (down payment), which means the loan-to-value ratio (LTV) is lower. If you are unsure of whether or not you would get approved for a conventional loan for your business, you can send us an email, submit our online application, or give us a call and we can help you decide. You should have your basic information in hand before you begin any loan application process. Lenders prefer borrowers with low risk that are getting a loan for a low risk business.

 

Loans with shorter terms, or length of time the money is borrowed, generally have lower interest rates. Lower LTV’s (higher equity), higher DSCR’s, higher credit ratings, stronger cash flows, longer company history, better management teams, and lower risk business products (higher demand for goods produced) all help reduce interest rates and increase your chance of loan approval. These are all commonsense concepts. The bottom line is, the better your business is performing and the better your credit history is, the easier it will be for you to get a loan at more favorable rates.

 

You may have heard of subprime loans. Subprime loans can provide money to businesses that may have a weak credit history, or have other issues that make them more of a credit risk to lenders. You may need a higher down payment, or equity, or more collateral to secure the loan. Businesses that have bad credit or have not been in business very long, have a harder time getting a conventional loan, so they may turn to subprime lenders for help in getting a loan. Interest rates are usually much higher than conventional commercial rate, often double or more.

 

Hard money loans are asset-based loans secured by the value of the real estate. Hard money loans are usually sought by borrowers with poorer qualifications and lower credit scores. Interest rates are typically higher than conventional loan rates because of the higher risk of the borrower; interest rates are usually in the 8% to 12% range, but can be higher.

 

Commercial lending is generally available locally at banks where you live, and through online companies, such as World Net Capital I. Depending on your personal situation and needs for the commercial loan, you may prefer to work with a local broker or lender, or you may choose to work with a company online if you are comfortable with computers and shopping online. Using an online company is just as easy as dealing with a local lender, and can be done from the comfort of your home or business office. We charge no upfront fees for submitting our online application or submitting our application package which we use to determine if you are eligible for one of our loans. This is a great advantage of working with World Net Capital I. We also work with brokers in funding commercial properties, so even if you prefer to work with your own local broker, you can have them work with us online. All information you submit to us is held in the strictest of confidence, and is destroyed in the event that we no longer need your data.

 

World Net Capital I is a commercial lending expert specializing in commercial loans, hard money loans, and portfolio purchases and does not offer any residential or subprime loan products. Please contact us today if you have any questions, need advice, or would like to determine what you need for loan approval.

 

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