This business financing strategy article will describe the importance of avoiding “problem commercial lenders”. The article will NOT name specific lenders to avoid, but key examples will be provided to illustrate why prudent commercial borrowers should be prepared to avoid a wide variety of existing commercial lenders in their search for viable business financing strategies.
I have been advising business owners for over 25 years, and I have encountered many business financing situations which have involved commercial lenders that I would not recommend as a result. These problematic situations have especially involved commercial mortgage loans, business cash advance situations and unsecured working capital loans. As a direct result of these experiences and daily conversations with other commercial loan professionals, I do in fact believe that there are a number of commercial lenders that should be avoided. This conclusion is typically based on more than one negative experience or an obvious pattern of lending abuses.
I have published many commercial loan articles which are designed to assist commercial borrowers in avoiding business loan problems. One of the most serious business financing situations is a commercial lender that causes business loan problems for their commercial borrowers on a recurring basis. It is particularly this type of commercial lender which prudent commercial borrowers should be prepared to avoid unless viable alternative business financing options do not realistically exist.
Here are a few examples of why certain commercial lenders should be avoided.
BUSINESS FINANCING STRATEGIES AND COMMERCIAL LENDERS TO AVOID EXAMPLE NUMBER 1 – Yes or No?
I have published an article which discusses the tendency of many banks to say “YES” when they mean “NO”. Such banks will typically attach onerous business financing conditions to commercial loans instead of simply declining the loan. Business owners should explore other commercial loan alternatives before accepting business financing terms that put them at a competitive disadvantage.
BUSINESS FINANCING STRATEGIES AND COMMERCIAL LENDERS TO AVOID EXAMPLE NUMBER 2 – The Commercial Appraisal Process
For commercial real estate loans, commercial appraisals are an unavoidable part of the commercial loan underwriting process. The commercial appraisal process is lengthy and expensive, so avoiding commercial lenders which have displayed a pattern of problems and abuses in this area will benefit the commercial borrower by saving them both time and money.
BUSINESS FINANCING STRATEGIES AND COMMERCIAL LENDERS TO AVOID EXAMPLE NUMBER 3 – Think Outside the Bank
In smaller metropolitan markets, it is not unusual for a dominant commercial lender to impose harsher commercial loan terms than would typically be seen in a more competitive commercial financing market. Such commercial lenders routinely take advantage of a relative lack of other commercial lenders in their local market. An appropriate response by commercial borrowers is to seek out non-bank business financing options. It is neither necessary nor wise for commercial borrowers to depend only upon local traditional banks for working capital and business cash advance solutions. For most business financing situations, a non-local and non-bank commercial lender is likely to provide improved commercial financing terms because they are accustomed to competing aggressively with other commercial lenders.
BUSINESS FINANCING STRATEGIES AND COMMERCIAL LENDERS TO AVOID EXAMPLE NUMBER 4 – Meaningless Pre-approvals
Commercial borrowers frequently want a commercial lender to approve their commercial loan at the earliest possible point. The assumed benefit to this early business loan approval is that it will enable the commercial borrower to make other business plans which depend on the business financing being finalized.
Because an ethical commercial lender will treat any form of an approval very seriously, commercial borrowers should expect that a meaningful version of such an approval will not be realistically possible in just two or three days. Nevertheless there are commercial lenders who provide their own special version of a pre-approval within just a few days of receiving preliminary application information. Because this abbreviated approach to pre-approvals almost always produces unexpected surprises for the commercial borrower as the business financing process goes forward, commercial borrowers need to be extremely wary of any commercial lenders that take this approach.
Why do some commercial lenders provide such meaningless pre-approvals? There are two likely reasons. (1) To motivate the commercial borrower to stop considering other potential commercial lenders. (2) To provide a pre-approval that is similar to a structure prevalent with residential mortgage loans. Since many business loans are arranged by residential mortgage brokers who are frequently unfamiliar with common business financing procedures, this reason will be especially applicable when dealing with commercial lenders that specialize in dealing with residential mortgage brokers.
Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.
Business is usually business management like managing a hotel, a building, a transportation company etc. Finance is more like helping big companies invest and manage their money and help rich people manage their money, more or less making big decisions. In finance you can help people invest and make more money(like a broker or financial adviser). Accounting is very hard math and deals with doing all the math for a business like calculating how much money is being spent, being earned, and how much is being lost and wasted. I think you want to be a financial adviser or a financial manager. All these fields are doing really bad right now because rich people are not investing and these jobs are being laid off.
Thank you so much for this. Very well explained, and I liked the example
I would estimate that getting a B.S. in business finance, and then getting an MBA would get you an additional 20% salary over a bachelors degree. You didn't specify what part of the country you are looking to be employed, and it also depends on where you get your MBA or MF degree from. Generically speaking, a first year MBA/MF candidate with non experience can expect a salary of anywhere from $60 to $80K from a second tier school. However, an advance degree from an Ivy League School, or even a Big Ten school with a great business school should start you off at minimum of $100K. However, this is not the best economy to be looking for a job.
My advice to you would be to complete your bachelors degree, get hired by a very good firm, that will also reimburse you to get a Masters degree (do you really want another $80K in student loans, or do you want your employer to pay for them—but tuition reimbursement for a masters degree is considered taxable income) and work and get your Masters degree at the same time. Your company, if they are interested in keeping and investing in their best talent, should reward you for your hard work and diligent. Good luck!
Thank you!
great job A+
Very informative!
Very concise and put in a simple manner for all to understand. Just what I needed! Will now look at your other videos.
donald trump
Try Philosophy, or Logic and Reasoning. I've heard people have done well with those.
great job
Your uncle must be trying to persuade you NOT to do some action involving business/finance. Quite naturally, you must respect your uncle as he is your elder. If you have talent in that area, and you are satisfied that you will do well, go for it.
Keep the peace!
Great intro tutorial on Balance Sheet–one of the more confusing reports every woman entrepreneur and business owner should review regularly!
Yes, you can, in the 1990's. Unfortunately you probably will not be able to now. I remember around 2000 everyone was going for finance/real estate degrees…..well that market is dead. The only thing that is left over is selling insurance/stocks/mutuals. I have a Management degree with a lot of finance and I have been approached by two employers to hock their insurance products. I too, hate selling those types of things, especially in a terrible economy. The only thing you might possibly get with a finance degree is some office A/R or A/P job making $12/hr max. Business degrees are virtually worthless right now since most businesses are closing/cutting/downsizing. It's just bad luck. Most people I know do not have a job, those with degrees who do have jobs make $7.25/hr. Since you're finince savvy, start investing in gold, silver, get rid of any fiat currency youo have, invest in a nice gun, ammunition because jobs are not coming back and the only thing you might have is what you can get now.
certificate requirements change over time,
do whats needed to get into a big firm but if after 2 years you dont cross the sevenfigure income bar move to a smaller firm or you will get forced out on their terms
best plaus – learn a foreign language from a BRIC country big big big plus
For startups and new businesses, I would recommend
http://www.angelbusinessloans.com
i loved this video .. 5 stars a plus u rock business lady
whoa, country bumpkin!
You have lot of options other then accounting to choose as a career with a bachelors in business finance. You can become a Financial consultant, adviser, planner, a stock analyst… the options are numerous i would suggest you to evaluate your strengths and then choose the career which you think would best suit you.
HOW ABOUT THIS WE GO TO THE BANK YES WE AND THE BANK CREATE NEW MONEY WE GET £10.000.Say AND THE BANK GETS £10.000 SAY .ALL AT THE SAME TIME ON THE SAME DAY..NO ONE OWES..NO ONE..WE ALL GOT OUR MONEY..AS WE CREATED IT.SO THE old WAYS OF BANKING OUT OF Dated.ALL BANKS AM going uder.UK GOVERNMENTS AT TO BUY ALL THERES AND EU AND USA ….AM LIKE GREASE BANKRUPT NEARLY..ITS GOING TO BE A BIG WW3 THATS Y THERE WARS SOMETIMES TO START NEW WORLD ORDERS AND THE ANWER HERE WITH US
You can try the small business administration for start up funding but you will still have to deal with a bank.
Creating an LLC is no more difficult than filing a form with your home state and paying a fee. Before you do ask a tax advisor because you may want to set up a C or S corporation instead.