When you need money to purchase a business property, whether to open a new business or expand your current one, commercial mortgage loans can help you get the cash needed to move forward. You can apply for a commercial mortgage loan through a traditional lender such as a bank or through a private lender. To get approved for this type of loan, you should already have a property in mind that you'd like to buy, a good credit history, and either a well put together business plan or proof of a stable financial history for your business.
No matter which lender or type of commercial mortgage loan you choose, there are many benefits supplied by this type of loan. Let's look at some of these benefits and see if they apply to your situation.
Buy or Expand while Maintaining Cash Flow
Even if you already have plenty of cash on hand, you might not want to spend it all on a new commercial property purchase. Obtaining a commercial real estate loan will allow you to keep a steady cash flow while paying back your loan over time. A steady cash flow will give you freedom to purchase supplies and inventory, pay employees or contractors, and promote your business. And best of all... the interest on your loan is tax-deductible!
Numerous Business Opportunities
A commercial mortgage loan will open a world of opportunities for you to start or expand your business. These loans can be used for office buildings, restaurants, repair shops, health care facilities, retirement homes, apartment complexes, condos, hotels, strip malls, schools, car washes, or even churches. The loan will enable you to purchase an existing building, construct a new building, or buy multi-unit properties for rental purposes.
Better than Renting
Buying is better than renting... even in the business realm. If you must rent due to location or circumstances, then by all means, don't allow a rental situation to keep you from pursuing your business dreams. But in most cases, it will benefit you now and in the future to buy your own business property. When you own a property, you can make improvements or remodel whenever needed. You can also build equity as you make monthly payments. In some cases, renting will be the same or even more than a mortgage payment. So, why waste money on rent payments month after month if you don't have to?
Renting will also place you and your business at the mercy of the building's owner. If the owner decides to sell or retire, you could be left without a building to operate your business. If the owner sells the property to another investor, your rent agreement could change significantly and your rental payment may increase as well.
Going Out of Business
If for any reason you have to close your business, you'll be able to sell the property along with the business - not just your business' name and inventory. Most commercial mortgage loans are assumable, so a qualified buyer could take over your loan terms and payments without having to start a new loan of their own. You should check with your lender or broker to be sure this can take place if ever the need arises.
Customized for Your Loan Needs
Another benefit of commercial mortgage loans is you can usually pick and choose which lender, broker, or type of mortgage you'd prefer. There are private lenders that can work with you if you have special loan needs or if a major lender has turned your loan down due to credit reasons. You can also choose from a number of mortgage plans, including fixed rate mortgages, variable loans, balloon mortgages, and interest-only mortgages. Though fixed rate mortgages are the safest, your situation may call for a lower initial payment or other special needs. You can speak with a broker to find out which option best fits your business plans.
Whether using a mainstream lender or a private lender, be sure to check out your online options as well. You can obtain a commercial mortgage loan through an online broker or private lender and potentially save lots of time and money!
Countless surveys and articles have been written about how an independent commercial mortgage broker can market themselves. You can attend seminars, read books, listen to web broadcasts, or get the advice of your business associates. Marketing advice is everywhere, but who gets it? Who does it right? What can you do to bring clients to your doorstep? I'm not talking about leads, you can buy leads. I'm talking about real clients, the kind of clients that need your expertise, and will pay you real money to get it. I will tell you who will not come knocking at your door. Clients that don't know you exist.
Ok here is the secret to marketing. Do something. Whether right or wrong, do something. If you do nothing, it will always be the wrong thing. Don't be afraid to get your name out there. If you do something, you will be right some of the time and "some of the time" will bring you clients. It's not about a fancy ad campaign. Most of us can't afford that sort of expense and it won't work anyway. What clients need in the commercial mortgage industry is expertise and options. Options that will get their deals funded, and options that you, the expert commercial mortgage broker can offer. Educate those clients and you will reap the rewards.
Step 1- Figure out what makes you unique. Why would someone want to work with you to finance their commercial mortgage? Are you knowledgeable about the mortgage industry? Do you have multiple commercial lender contacts that make you invaluable to a potential client? If so, let them know.
Step 2- Write articles, send informational emails, write a newsletter, speak at investor events, anything to let people know who you are and why they need to do business with you. Above all educate your clients about yourself and about the commercial mortgage industry. Don't assume that they know what they are doing, assure they know what they are doing. It will make your job easier in the long run.
Step 3- Do it with a smile, self confidence, and a helpful spirit. No one wants to work with someone who is condescending or pessimistic. A lot of people have made it far with a smile and a great attitude. Know you can do it and get out there and do it. Henry Ford once said "Whether you think you can or you can't, you're right".
My time in military service taught me one great life lesson. That lesson is to control the things in your life that you can control and don't worry about the things you have no control over. There is nothing you can do to change those things. Think about that for a moment. How much time do you spend worrying about interest rates, traffic, or global warming? These are all things you have no control over, so don't worry about them. Whether your phone will ring tomorrow, next week, or next month with your next commercial deal is something you can control. Something you and only you can make happen. Take some time to decide what works best for you. What fits your style and abilities? Are you a good writer? Then write some articles and educate the commercial investors in your area on commercial finance. Are you better face to face? Join every investor or community group you can and go meet people. Having no budget is not an excuse for not marketing.
They only secret is to do something. No one knows your business better than you do. What makes you different? Why should someone do business with you? All you have to do is figure that out and let people know. Get the word out any way you can. Marketing is not magic.
Both Chris Robertson & Patrick Bedall are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.