Commercial borrowers need to realize that they have more commercial loan options than they think. These business financing options are referred to here as "Thinking Outside the Bank" because most commercial borrowers believe that a bank is the best source for a commercial loan. Non-traditional business lenders are commonly considered to have the competitive edge for a variety of business financing situations.
A bank might offer to provide business financing but require overly stringent terms. In other cases a traditional bank will decline the commercial loan because they do not provide commercial mortgage loans to the commercial borrower's business category. For both examples, a commercial borrower will benefit by "Thinking Outside the Bank".
Some business loan borrowers are likely to feel that a traditional bank is their best source for a commercial mortgage. However, because most traditional banks focus on a small number of established industries, non-traditional (non-bank) and non-local commercial lenders should be considered for most business financing situations. Therefore the recommended commercial loan strategy (as discussed in this article) is to "Think Outside the Bank".
As I reported in a previous business loan discussion, in many commercial mortgage situations it is common for a local bank to assess stricter commercial loan conditions than would typically be seen in a competitive business financing scenario. Such banks can often take advantage if there are few business lenders in their market.
An effective response by borrowers is to emphasize business financing options other than the traditional ones. It is not wise for business borrowers to depend only upon local banks for commercial loan possibilities. For common commercial financing circumstances, a non-local business lender can frequently provide the best business loan terms because of competition with other business lenders.
There are three business loan scenarios in which borrowers will commonly discover that non-traditional lenders will offer terms that are better for the business owner: (1) commercial real estate financing programs; (2) working capital business loan programs; and (3) business management programs for credit card processing.
COMMERCIAL LOAN PROGRAMS - COMMERCIAL MORTGAGE BUSINESS LOAN CHOICES
Two of the most common commercial mortgage difficulties experienced by commercial borrowers can be avoided if they "Think Outside the Bank". The first business financing situation is the prevailing practice of traditional banks to avoid most special purpose properties such as funeral homes, churches and golf courses.
Another commercial financing scenario is the common practice of commercial banks to include recall terms in their business loans. With such terms the bank can require repayment of the commercial mortgage under stated conditions. These undesirable business financing requirements can usually be eliminated by using a non-bank commercial lending option.
BUSINESS LOAN OPTIONS - BUSINESS CASH ADVANCE PROGRAMS
Business owners that accept credit cards will frequently qualify for a working capital business loan via credit card financing. Traditional lenders will often be very poor candidates to consider if a business needs help with a business cash advance.
Because even thriving businesses frequently need more cash than they can borrow from a bank, it can be of critical importance for a business to "Think Outside the Bank" and locate non-traditional lenders to assist with this business financing need.
BUSINESS FINANCING ALTERNATIVES - CREDIT CARD PROCESSING PROGRAMS
The selection of a credit card processing service can be critical in improving the cash flow of a business with significant credit card activity. Credit card processing providers can be combined with the credit card financing process mentioned earlier.
In managing a merchant cash advance program, it is often possible to obtain a significant improvement in credit card processing activities. It is probable that a non-traditional lender will be the key source of effective help with credit card processing because traditional banks are usually not competitive in providing assistance with credit card financing.
A closing commercial financing comment: I have published a previous commercial loan report about business lenders to avoid. I want to emphasize that there are both traditional and non-bank lenders which should be circumvented for all of the business financing options discussed in this article.
So when commercial borrowers "Think Outside the Bank", it is still of critical importance that they are prepared to avoid a wide variety of problematic non-traditional commercial lenders in their search for viable business financing, especially when it involves business cash advance (credit card receivables and credit card factoring) programs, credit card processing services and commercial real estate financing.
Author's Note: Steve Bush is the CEO of AEX
Business Financing - Commercial Mortgage Solutions. AEX Commercial Financing Group [ http://aexcommercialfinancing.com ] and Steve Bush provide
business opportunity financing and credit card processing assistance throughout the United States.
Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush.
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