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It is important for commercial borrowers to understand that they have more business loan choices than they are likely to realize. I refer to these commercial mortgage choices as "Thinking Outside the Bank" because the average commercial borrower probably believes that a traditional bank is the best source for a business loan. Non-traditional commercial lenders are increasingly considered to have the competitive edge for a number of commercial mortgage scenarios. A bank might offer to provide business financing but require overly stringent terms. In other cases a traditional bank will decline the commercial loan because they do not provide commercial mortgage loans to the commercial borrower's business category. For both examples, a commercial borrower will benefit by "Thinking Outside the Bank". Commercial loan borrowers might feel that a bank is their most likely source for business financing. However, since traditional banks usually focus on a few types of businesses, non-traditional business lenders should be emphasized for any business loan situation. Therefore the recommended commercial mortgage strategy discussed in this article is to "Think Outside the Bank". As I reported in a previous business loan discussion, in many commercial mortgage situations it is common for a local bank to assess stricter commercial loan conditions than would typically be seen in a competitive business financing scenario. Such banks can often take advantage if there are few business lenders in their market. A prudent response by business borrowers is to consider non-traditional commercial mortgage options. It is not necessary for borrowers to depend upon traditional banks for business loan strategies. For typical commercial loan scenarios, a non-bank lender can often provide better business financing terms because of the competitive market situation. There are several business financing situations in which commercial borrowers will frequently find that non-traditional commercial lenders are better positioned to provide terms that are more advantageous to the commercial borrower: (1) commercial real estate loan programs; (2) business cash advance and credit card financing programs; and (3) credit card processing programs. Business Loan Options - Commercial Mortgage Loan Programs Two of the most prevalent commercial real estate loan obstacles can be precluded with a "Think Outside the Bank" mentality by businesses. The first commercial mortgage obstacle is the common practice of most banks to decline business financing for special purpose commercial properties such as churches and golf courses. The second business financing situation is the typical practice of most commercial banks to attach balloon and/or recall provisions to their commercial mortgage loans (which means that the bank can require early repayment of the commercial loan under various conditions). Both of these undesirable business loan situations can usually and easily be avoided by considering a non-traditional and non-bank lender. Commercial Loan Choices - Merchant Cash Advance and Working Capital Loan Programs Many merchants that accept credit cards in their business will qualify for a merchant cash advance with credit card factoring. A traditional bank will usually be a poor source of help if a business needs to use credit card financing. Because even thriving businesses frequently need more cash than they can borrow from a bank, it can be of critical importance for a business to "Think Outside the Bank" and locate non-traditional lenders to assist with this business financing need. Commercial Loan Alternatives - Programs for Credit Card Processing Management The selection of a credit card processing service can be critical in improving the cash flow of a business with significant credit card activity. Credit card processing providers can be combined with the credit card financing process mentioned earlier. In coordinating a business cash advance and working capital business loan program, it is usually possible to achieve improvements in the business owner's credit card processing services. Traditional banks are usually not competitive in providing assistance with a business cash advance using credit card receivables. So it is likely that a non-traditional lender will be the major source of competitive help with credit card processing improvements. A closing business loan observation: I have written another business financing article about avoiding certain commercial lenders. I want to stress that there are both non-traditional and traditional lenders which should be bypassed. So when commercial borrowers "Think Outside the Bank", it is still of critical importance that they are prepared to avoid a wide variety of problematic non-traditional commercial lenders in their search for viable business financing, especially when it involves business cash advance (credit card receivables and credit card factoring) programs, credit card processing services and commercial real estate financing. Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.
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