Build Better Business Credit and Get Approved for Commercial Lending

One of the first things lenders and brokers look at when reviewing a loan application is credit score. Check out these simple ways to build and restore your credit to garner commercial lending eligibility.

In our personal and business lives, we sometimes can’t avoid the pitfalls that get us trapped into a bad credit score situation. Unfortunately, it can be one of the main reasons creditors reject an application for Arizona commercial lending. Nearly half of all small business loans get rejected due to low credit scores. Maintaining good business credit can also benefit you by helping you get lower interest rates on loans, better suppliers’ terms, additional lines of business credit and it could even help your business grow. Customers can search a company’s credit score and could very well base their choice to do business with you (or not) based on that number.

Aiming for a credit score of at least 680 is a good goal. The magic number is 700 (or higher!), but you don’t have to get fixated on that number at first. Start establishing credit with business vendors, and make sure you pay on time. Keep your public records free of credit “dings” such as bankruptcies, tax liens, judgments and debt collection. A long credit history is a good thing – but not when it’s riddled with ghosts of credit mistakes that can tarnish that history for years to come and diminish your chances for receiving Arizona commercial lending.

Ensure that your current FICO credit information is updated and as complete as possible with the three credit bureaus - Equifax, Experian and TransUnion. Even if you can’t get approved for a bank loan due to your credit score, resist the temptation to borrow from lenders that don’t report to the credit bureaus.

Getting rejected by a bank for bad credit doesn’t mean you should subject yourself to non-credible lenders that don't report to the bureaus to get commercial lending. There are other lending institutions besides banks that do report to the bureaus but may also have less strict lending policies when it comes to bad credit.

Charging your credit card can actually serve as a beneficial way to establish your business line of credit.

Using credit is a good way to establish a credit history, so don’t be afraid to utilize your lines of credit. However, there is a fine line between using them and going overboard. You don’t want to max out a credit card, so stay within 30 percent max of your credit limit.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

It Ain’t Easy Being Green… But it Can Help Businesses Secure Commercial Loans

Eco-friendly building standards are important and beneficial for the earth and your bottom line. In some cases, it can even help you get approved for large and multiple SBA commercial loans.

The SBA 504 Loan was specifically designed for helping small businesses as they struggle to get a loan to take their growing businesses to the next level. According to the SBA.gov website, this loan program, also referred to as the Certified Development Company (CDC)/504 Program, is “a long term financing tool for economic development within a community. CDCs provide growing businesses with long-term, fixed-rate financing for major fixed assets, such as land, buildings and machinery and equipment.

In the case of green constriction, energy efficient buildings, green retrofitting and renovation, and renewable energy production for commercial purposes, the SBA Green 504 loan has a number of benefits for applications. It serves as a second mortgage that can be up to $5.5 million, with loans available on a “per project” basis. This allows for larger transactions in the $20 million range, because the standard SBA eligibility maximum of $5 million per borrower does not apply in the instance of the Green 504 program.

The Green 504 also does not include the job creation and retention requirements of a typical SBA 504, so smaller businesses with fewer employees now have a better opportunity to garner larger loans for businesses that have a lot of space, but not that many employees. This loan also offers financing for the acquisition, development or even refinancing of energy efficient buildings with tangible net worth and income requirements maximums increased to $15 million and $5 million for small and mid-sized businesses.

What are the Qualifications Small Businesses Owners Need to Get Approved for Green 504 Commercial Loans?

Business owners that are currently leasing or own a business can qualify by financing another building that consumes 10 percent less energy than the current owned or leased building. Another qualifying factor is if you purchase a building you’re currently leasing with the intent to make improvements to reduce energy usage by 10 percent. Examples of improvements include swapping out standard light bulbs for LED lighting, which can amount to up to 30 percent of a building’s energy consumption. A third option is if you currently lease or own, but want to construct a few building with 10 percent less energy usage, including LED lighting, better insulation or more efficient HVAC system.

Building or adding energy efficient strategies to an existing building are a win-win solution for any community, and there are even more benefits.

The Green 504 makes it easier for businesses that don’t have a government guarantee garner financing to purchase, build or even refinance numerous buildings with the maximum $5.5 million in SBA financing for each individual building project. That number refers to the SBA guaranteed second mortgage, and with no set limit on the first mortgage amount limit, larger projects are now very doable through the Green 504.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

What Does a Commercial Mortgage Broker Do and How Can One Benefit You?

A Commercial Mortgage Arizona Broker bridges the gap between individuals and banks — helping to make a successful loan transaction process by serving as a liaison between the two parties. These professionals know the ins and outs of the process and can make dreams come true for those looking to get a loan.

Working in the real estate industry, a commercial mortgage Arizona broker works as a third party between financial institutions like banks and people seeking to get a mortgage loan on a commercial property. These experts general work with a number of financial institutions so they are able to offer their clients, who they sell loans to, more borrowing choices. This can benefit you because they can “pick and choose” from banks that may be better suited for the type of loan you are looking for or one that may be more lenient with their loan to value percent, for example.

But not all Arizona commercial mortgage brokers are created equal. These individuals are also required to have their license to operate in this profession; however, each state’s requirements for the licensing are different. Be wary of working with the first broker that seems over eager to work with you. Take your time and do your homework before choosing a broker to work with — you may even be able to find out if they have complaints against them.

The expert should be able to effectively review your eligibility, such as your repayment ability, credit score and history, and other important documents. Once they’ve helped you sort these criteria, the broker submits an application on your behalf to the lender he feels is best suited to your loan request. He will continue to serve as the “middle man” through the application approval process.

How Can You Be Sure Your Arizona Commercial Mortgage Broker Can Benefit Your Needs?

Getting to know a little bit about the individual before working with them will help you get a feel for whether they truly have your best interest at heart and understand your specific and unique needs. It’s important that you feel comfortable communicating with them and think they can properly communicate your needs to financial institutions.

Find a broker who you feel confident in, and one that proves they are best qualified to help you get the loan you need.

When looking to utilize their expertise, seek a professional that is dialed in to the way the loan market works. They should have savvy computer skills to stay up to date with their databases, know all the details associated with the various loan packages, and they should be able to offer you the advice you need to help you decide which product is right for your specific loan request.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Qualify for Commercial Loans

There are many requirements that must be met before qualifying for commercial loans. Learn what banks are looking for, and how you can increase your chances of eligibility.

In times of economic recession, banks and lenders can be a lot less lenient on the loans they will underwrite. If you’re not sure if you’ll qualify, there are three key expectations that underwriters will review before considering a loan: your credit, your repayment ability and your collateral.

First, a good credit score of at least 680 or higher is required. If you have a score of over 700, that is ideal. However, those without those high credit scores can still sometimes be approved. Next, the bank looks at the applicant’s capacity for repayment of the loan. Usually this means defining the cash flow of the property’s net income, which should exceed the mortgage payment by around 25 to 45 percent. Finally, collateral is expected; it is typical to expect a conventional commercial loan to fall between 50 and 70 percent loan to value.

Beyond these three components, the environment of the economy is important when it comes to qualifying. Some banks may be willing to accept a lower credit score or give a higher loan to value percentage. Some are likely to give a higher loan to value amount if the deal is very strong in the case of a property purchase or if you have lots of liquid assets. Sometimes, it is simply about timing.

If One Bank Rejects My Commercial Loan, Will I Qualify At Another?

There are thousands of banks across the country. Each has their own specific set of requirements to be met in terms of credit score, repayment capacity and collateral, and each has times in which it might have become too liquid, so it needs to loosen up its moneys. Casting a wide net to many banks is a good idea.

Before you apply for your commercial loan, make sure your credit, repayment capacity and collateral are in order to ensure the best chances of your loan being approved — but don't get discouraged if you don’t qualify right away.

Do your research on the banks and lenders before you approach them with your request so you know a little bit about what is expected. Be as prepared as possible with a solid business plan, reasonable need for your loan request, and preparation of items such as income tax returns, financial statements, bank statements, and legal documents like articles of incorporation. Banks have to protect their assets, so even if your ducks are all in a row, so to speak, that doesn’t guarantee loan approval. They may see your loan as too risky or consider the amount of debt you have to be too much. However, there are options such as Wall Street nonprime lenders and commercial mortgage companies that can offer subprime commercial loans.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

When to pursue a Bridge Loan for Residential or Commercial Lending

Exactly what is a bridge loan and what is it best used for? Understand the basics of a bridge loan and when you should consider pursuing one for residential or commercial lending.

As its name suggests, a bridge loan is designed to “bridge the gap” from one asset to the next or until you secure an alternate source of financing for your project, business, real estate investment or home. In commercial lending, they are used to cover business expenses until expected capital becomes available. It is a short-term loan with a payback that usually ranges from 3 to 12 months, though some lenders offer longer repayment options. As an equity-based loan, it is backed by collateral such as real estate or inventory, and is usually considered when “quick cash” is needed.

Bridge loans can be the ideal solution when time is not your friend and immediate capital is required. The funds from a bridge loan are usually available in as short as a few days to as long as a few weeks, giving you the capital you need to move forward on your project or purchase. Many home buyers use this type of loan when they are purchasing a new home before their existing home sells. Today’s real estate market makes this avenue fairly safe and gives you the capital you need to continue making mortgage payments on your first residence or make a down payment on your new home. It avoids having to make an offer on a contingency to sell basis, which can often mean the difference in acceptance or rejection in a seller’s market.

Bridge loans are also useful for commercial lending when developers require funds for renovating a distressed property, when a small business needs quick funds to cover operating costs, or when capital is needed to fulfill seasonal orders. It can provide quick funds in order to start a build-out project or complete a quick buyout in order to gain controlling interest of a business. Many developers use this type of loan to begin work on projects while awaiting the approval process of a more traditional loan.

How to Obtain a Commercial Bridge Loan

While more traditional loans require good credit, the most important aspect of obtaining a bridge loan is collateral such as equity in real property. In order to assess the risk, a lender may also require a plan for repayment or exit strategy. On your part, perform due diligence by determining if there are prepayment penalties and what other costs are involved. In many instances, the need for immediate funds offsets any concerns regarding costs and penalties. It may also be possible to defer your first payment for a certain arranged period.

Always perform due diligence and obtain full disclosure

regarding your transaction costs, penalties and payment plan.

At Level 4 Funding, we are commercial lending experts who pride ourselves on providing the best possible service and believe in giving our customers all the information they need to help them make the best possible loan decision for their project, real estate investment, business or home. We offer bridge loans with rates from 7.99% for up to 3 to 24 months, interest only. Call us for a complimentary consultation.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Types of Hard Money Lenders for Commercial Lending

In the world of hard money commercial lending, there are various types of lenders. Let’s take a look at what each brings to the table and how you can make the right decision for yourself, as a borrower.

There are several types of lenders available for those that are looking at a hard money, or private lender, for their unique needs. As a real estate investor, it’s important to understand how to raise the needed capital so that when you find “the deal” you have the funds to secure it. One such entity is the direct lender. This person is putting up their own money. It is often difficult to find these individuals and it involves filling out multiple application forms for each independent investor.

Hard money mortgage loan brokers work with numerous investors and pick and choose according to your specific property or project. Those that have been in the business for years will often work with hundreds of individual private investors. They know which of the investors they work with are interested in bridge loans, which ones are drawn to the fix and flip projects, and which prefer large commercial projects such as office or retail. Their search is for the right investor and for the best deal possible for their client. When working with a mortgage broker, it’s best to choose one that has been in the hard money lending business for years because it takes a long time to develop these types of commercial lending connections.

Private single and multi-family offices are wealth management firms for the extremely high-net-worth individuals or families. This is a difficult group to break into and often requires “knowing someone that knows someone.” Mortgage loan brokers with years of experience under their belt have often tapped into this very secretive world of private money lenders.

Funded Hard Money Commercial Projects

Hard money lenders will often provide commercial lending for a variety of projects, depending on their interests and established investors. A few of these include ground-up construction, fix and flip, home purchases, business needs, partner buyouts, improved land loans, multi-family, office buildings, warehouses, shopping centers, retail outlets and mobile home parks. Not every lender is the same. Some have very limited projects and properties that they will make loans on. Others carry a more versatile portfolio of investments. For instance, some will lend on improved land and lots while others will not.

Find a hard money mortgage home broker that you’re comfortable with and that you can trust.

It’s probably evident that the best and easiest way to secure hard money commercial lending is through a hard money loan mortgage broker. You’ll want someone that you’re comfortable with and that you can build a relationship with that will last through your many real estate transactions. Trust your gut and ask the appropriate questions such as time in the business and what their background is in the real estate industry. Check on borrowing requirements and ask if there is any prepayment penalty. While you are delving, or have already dived, into a business that naturally carries risk, it also offers tremendous rewards. Call us at Level 4 Funding. We may just be the mortgage brokers that can help you with the funding you seek for all of your real estate investments now and in the future.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

The Difference between Participating Commercial Mortgage and Hard Money Loans

Both participating commercial mortgage and hard money loans are common avenues that real estate investors pursue when looking to fund a new or existing project. Learn the difference between the two and which one may be right for you.

According to CNBC, the Federal Reserve recently reported that loan officers at U.S. banks are tightening lending standards on commercial mortgages. This includes standards for construction and land development loans as well as loans secured by multifamily residential properties. This loan environment causes real estate investors, builders and businesses to take a look at alternative lending operations. Two of these alternative strategies include participating mortgages and hard money loans.

A participating mortgage loan is just that—participating. This means that the lender shares in part of the revenue that the commercial property generates. In addition to the mortgage payment and interest, they will also receive their share of the profits which may come in the form of rental income or proceeds from a sale. These types of loans are common in office and retail projects as well as apartment properties where long-term leases are involved. It is attractive to borrowers because the lender, in these instances, may accept a lower base interest rate and a higher loan-to-value ratio.

These are often high-risk loans that a conventional lender would not be able to make.

A hard money lender is usually a private group or individual investors that offer commercial and sometimes residential loans. Underwriting criteria is less restricted than those of a traditional loan. They do require a plan, including an exit plan, as well as a reasonable loan to value. Creditworthiness does not play a large, if any, part in the decision to fund. In essence, it is really about available collateral. A hard money lender can approve and fund a commercial mortgage much faster—sometimes in as little as a few days. This is valuable to investors needing to get going on a project or a business needing immediate funding for their operations.

What Types of Property is Not Funded by These Alternative Sources?

In most cases, a hard money lender will not make a loan on an owner-occupied residential property. This is due to increasing regulations by the government and stricter guidelines. For others, the location and the market matters just as much as the type of property. Some lenders focus locally while others are available for nationwide lending.

There are specific questions you will need to consider for either type of commercial mortgage.

There are inherent risks in either type of loan. Be sure to ask the prospective lender for a full disclosure of fees and conditions. Don’t be shy when asking about their background and experience. Working with a mortgage loan broker can give you access to hundreds of investors with one phone call. The mortgage broker will, in turn, determine what investor would be best for your particular project and what the best rate is that they can obtain for you.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage