Key Examples of Special Purpose Business Finance Solutions
by Stephen Bush
A business loan to buy a business involving either golf courses or funeral homes is among the most difficult commercial mortgage and business finance scenarios. Golf course financing and funeral home financing involve special complexities not found in typical business financing situations. In both cases refinancing is usually even more difficult than the commercial loan to purchase.
Reduction in Commercial Lenders - Golf Course and Funeral Home Financing
To further compound the already difficult business financing for either a funeral home or golf course, fewer commercial lenders are providing competitive commercial mortgage business loan terms. There has especially been a significant reduction in the number of local and regional banks providing commercial loan programs for both funeral home loans and golf course loans.
AEX Special Purpose Business Loan Solutions -
Business financing to buy a business opportunity is a special business loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find.
AEX Special Purpose Commercial Real Estate Loan Solutions - Avoiding Problematic Commercial Mortgage Terms
Difficulties with Stated Income Commercial Mortgage Financing
Although a stated income commercial loan has a certain number of benefits in specific circumstances, the use of stated income business financing is not recommended for a funeral home loan or golf course loan. A major limitation of a stated income commercial mortgage is the maximum business loan possible. A further limitation is the low percentage of value for stated income commercial financing involving either golf course financing or funeral home financing.
Business Value and Commercial Real Estate Value for a Business Loan
For golf course loans and funeral home loans, the commercial real estate loan value is often less than the business value. This is particularly true with a funeral home appraisal. The problem with this disparity is that many business lenders will provide a business loan that includes only the commercial mortgage loan value, and this will produce significantly reduced business financing.
Exorbitant Commercial Loan Fees for Funeral Home and Golf Course Financing
Business owners should be prepared for reasonable business finance fees during the beginning of the business loan process for golf course financing and funeral home financing. There are a number of business lenders that have chosen to take advantage of the shortage of commercial loan choices for building, purchasing and refinancing a funeral home or golf course. A common tactic is to charge excessive fees of $25,000 and more even if the commercial financing is not finished.
Funeral Home Financing and Golf Course Financing - Avoid Problem Lenders
Successful business financing for either a funeral home loan or golf course loan will depend upon an appropriate choice involving the commercial lender. As noted above, the number of viable commercial lenders for this specialized type of commercial mortgage is rapidly shrinking.
The practical reality is that a commercial borrower should be prepared for the limited choices of truly qualified lenders for a business loan to buy a business involving funeral homes or golf courses. It becomes essential to choose a lender with the capability to successfully complete the required commercial loan process and simultaneously avoid the business finance problems described above.