Commercial Loans
Many banks are so aware of their reputation in the area community that they do not want to be renowned for refusing Commercial Loans requests by respected community residents. One option that many of those banks have adopted is the art of never asserting “no ” in such commercial financing scenarios.
What they are doing instead is to connect burdensome conditions when they assert “yes”. In most cases the bank doesn’t expect the commercial borrower to accept the conditions, and that the bank has evaded making the commercial loan without saying “no”.
Here are 2 examples of a bank exclaiming “yes ” when they mean “no”. A normal bank has made a decision to seriously cut the amount of Commercial Loans that they make to restaurants and bars. Rather than “officially ” junking this class from their lending portfolio ( which they feel would hurt their required image as a full-service commercial bank ), they have made a decision to add tougher terms to their commercial loan underwriting factors for such properties. As the bank has expounded “yes ” when they mean “no”, if an entrepreneur accepts the terms anyway, the borrower will finish up with commercial loan terms that are detrimental to the long term health of their business. When a business is refinancing their present business mortgage and wants to get a serious quantity of money out for assorted uses, it’s not weird for the bank to restrict the quantity of money to amounts as tiny as $100,000. Although the bank might make the company loan, if they will not give the quantity of money required by the commercial borrower, this is the same as declining the Commercial Loans . The bank has expounded “yes”, but a business may have over one million bucks in equity in their property and only be ready to access $100,000 ( which is a “no ” to the entrepreneur who wants to use a serious portion of their equity to grow the business ).
There are better options for commercial loans available somewhere else. Entrepreneurs should explore other corporate loan possible choices before accepting business loan terms that put them at a competitive downside.
Look for banks who specialise in Commercial Loans and have commercial loan terms like the following:Stated Earnings ( no tax returns and no earnings corroboration ) ; long term loans of 15-25 years ( or even more ) without recall or balloon provisions or yearly review factors ; business plans not needed ; unlimited money out when refinancing ; and minimum loan of $100,000.
