Funeral (chapter 7) Home Commercial Mortgages

October 30th, 2009 admin Posted in finance |

By Garrett36 Pierson36

Among the most difficult small business finance situations for commercial borrowers are businesses which require specialized commercial real estate. A particularly challenging set of circumstances both for initial purchases and refinancing is common for funeral home business loans.

When they are willing to provide commercial loans, regional and local banks will probably offer short-term business financing instead of a long-term business loan for funeral home financing. The maximum percentage of value for business financing is a key finance term that can differ from one lender to another. Particularly with commercial mortgage terms for percentage of value and length of loan, it is of critical importance to avoid undesirable business loan terms when refinancing or buying a funeral home.

As a further complication for a difficult funeral home business loan, fewer business lenders are currently willing to offer competitive small business finance terms. There are now noticeably fewer local and regional banks offering funeral home mortgages. Unfortunately this difficulty can also be seen with other specialized property financing including golf course mortgages.

There are several problems found in funeral home mortgages that are not typically seen in other commercial loans. It is likely to be more complicated than the acquisition business financing when the primary goal is commercial refinancing for funeral home financing. The commercial real estate loan value is often less than the business value for funeral home business loans. The potential for significantly reduced business financing will often occur because of this disparity which causes many lenders to provide a business loan that includes only the commercial mortgage loan value.

As already noted, the availability of suitable lenders for this specialized type of business loan is shrinking. Prudent choice of a lender will be a prime factor in securing a viable funeral home mortgage. While it is not an easy task, business owners must insist on a lender with the ability to successfully complete the complex business loan process and simultaneously avoid key commercial mortgage obstacles.

For funeral home financing, there should be reasonable commercial financing fees during the early stages of the business loan process. Many business lenders have used the reduced alternatives for funeral home acquisition, building and refinancing to take advantage of business owners. Charging initial excessive fees of $30,000 and higher is a common tactic by some questionable lenders.

The use of a small business finance consulting expert should be conducive to a better understanding of difficulties to anticipate in a complex commercial loan situation. The use of preliminary business consulting should be helpful in obtaining better terms and avoiding serious problems since funeral home business loans are among the more difficult commercial financing situations that a commercial borrower is likely to encounter.

Stephen Bush and AEX Commercial Financing Group provide commercial mortgage loan strategies and small business loans. Steve specializes in working capital loans and merchant cash advance services.

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