When you submit your business or commercial loan application, it may seem like it disappears into a black hole.
Understanding how the commercial loan processing system works can help reduce your anxiety while you wait for approval.
Below are some of the most common mistakes made when applying for a loan.
One, Not knowing what you qualify for:
Before you apply for a loan, you need to know where you stand, what you qualify for and what’s available in the market place.
Consider Winston Rowe & Associates they have strong relationships with a finite number of direct private capital, private equity, hedge funds, agency investors and regional and national commercial banks, each with a highly targeted commercial real estate financing practice.
At no upfront cost to prospective clients, they quickly analyze and asses prospective clients transactions and provide immediate feedback within 24 hours.
Two, Not reading the terms carefully before signing:
In your haste to get a loan, you may commit the common mistake of jumping the gun and signing without reading the details and terms of the loan. Not only should you take the time to read everything very carefully, but you should also ask questions about anything you do not fully understand.
Three, Not locking in a rate:
Interest rates change. If you think you've found a good rate, lock it in before it goes up. Too often, people make the mistake of getting greedy and waiting for interest rates to drop farther.
Four, Not explaining what the loan is for:
When applying for a business loan, you need to indicate how the money will be used. Lenders want to see that you know exactly what your needs are and how this loan will meet those needs.
Five, Making major changes:
Just as you do not want to open and close various credit cards before applying for a personal loan, you do not want to make significant personnel or other changes to your ongoing business structure before applying for a business loan. Lenders want to be able to see stability in how you do business and with whom.
Six, Applying only to the most convenient lender:
Although there are various lenders available, many people still head to their local bank first without shopping around. Credit unions and other sources are worth investigating. For example, if you are a small business owner, you should consider what the Small Business Administration can do through one of their loan programs.
With intermediary firms like Winston Rowe & Associates, the can help you negotiate the best terms, fees, and conditions from various lenders. They are experts at commercial real estate finance due diligence and underwriting and don’t charge upfront or advance fees.
Seven, Not having your finances up-to-date:
Whether you are seeking a personal or business loan, you shouldn't apply without having the proper financial documentation. This is an area where many people put the cart before the horse, and try to get a loan without making sure their financials are up-to-date.
Eight, Failing to have some equity in the project:
Not unlike a down payment when buying a home, having some equity in a business project significantly enhances your chances of securing a business loan. If you're not invested in the project, or in the business itself, the lender will be less enthusiastic about taking on such a risk.
Nine, Having no collateral or down payment:
You need to provide some collateral and or a down payment, should there be a default in payment.
Telling a potential lender that all your cash is into the deal is not going to cut it.
Ten, Not having a business plan:
If you're starting a business, you need to demonstrate how the business will operate and make money. A business plan is essential for a lender to see your goals and specifically, how you intend to reach them. You must include all applicable supporting data, including financials.
Commercial real estate investors have been turning to Winston Rowe & Associates for their national no upfront fee commercial real estate advisory and due diligence services, for commercial lending.
When you contact Winston Rowe & Associates a principal is always ready to take your call, they can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com