Business Loans Without Banks or Building societies Semi Commercial and Self Cert now the norm!

14 Good Reasons A Business Owner Might Not Go To A Bank or Building society For A Semi Commercial or Self Cert Commercial Property Mortgage

Traditional banks or building societies serve a very important role in the British and American economy. Self Cert and borrowing against Semi commercial property is quite new.  Nevertheless, when it comes to a business loan or mortgage, there are many reasons that small to medium sized business owners should not always use a traditional bank or building society.

There are not just one or two major reasons to obtain a small to medium business loan from another source. As you will see below, there are over a dozen compelling reasons to consider a source other than a traditional bank or building society for a small to medium business loan. For most small to medium business owners, five to ten of these reasons are likely to be applicable to them.

With many small to medium business loan borrowers, banks or building societies have already declined their loan application. That particular compelling reason to use a source other than a traditional bank or building society (being declined by a traditional bank or building society) does not even appear on the list below.

Here are 14 compelling reasons a small to medium business owner might not go to a traditional bank or building society for a commercial property loan. The compelling reasons shown below also indicate that for business borrowers that can get approved at a traditional bank or building society, there might be better options available elsewhere.

Good Reason 1: Minimum commercial property loan for many banks or building societies is £250,000 or more. With non-bank or building society small to medium business lenders, the typical minimum commercial loan amount is £100,000 in semi commercial and Self Cert borrowing.

Good Reason 2: Most banks or building societies charge an up-front commitment fee. Most non-bank or building society small to medium business lenders do not charge an up-front commitment fee for a commercial mortgage.

Good Reason 3: Most banks or building societies will severely limit the amount of cash a business borrower can get when refinancing a commercial mortgage. When a borrower is refinancing their business property with non-bank or building society small to medium business lenders, they can typically get up to £1,000,000 in cash.

Good Reason 4: Most banks or building societies are reducing their commercial property loan interest in properties such as bars/restaurants, auto service businesses and funeral homes. Non-bank or building society small to medium business lenders are very interested in these business categories (and many other special purpose properties) for a commercial mortgage.

Good Reason 5: Most banks or building societies will require business plans for a commercial mortgage. The cost to provide this is usually several thousand pounds. Non-bank or building society small to medium business lenders typically do not require business plans as part of their underwriting process for a commercial property loan.

Good Reason 6: Most banks or building societies will require income tax returns for a commercial mortgage. Non-bank or building society small to medium business lenders does not require tax returns or any income verification for a Stated Income commercial property loan. Many banks or building societies not requesting income tax returns will ask borrowers to sign Internal Revenue Service Form 4506 (which authorizes the lender to obtain income tax returns directly from the Internal Revenue Service). Non-bank or building society small to medium business lenders typically does not request borrowers to sign this form.

Good Reason 7: Most banks or building societies will require cross collateralization of family property for a commercial property loan. Most non-bank or building society small to medium business lenders do not require cross collateralization of family property for a commercial mortgage.

Good Reason 8: Most banks or building societies will require balloon payments or the loan will be subject to recall after periods as short as 3-5 years for a commercial mortgage. With a commercial property loan via typical non-bank or building society small to medium business lenders, all properties are eligible for 25-year loans and some up to 40 years.

Good Reason 9: Most banks or building societies will not permit seller seconds or secondary financing for a commercial property loan. With many non-bank or building society small to medium business lenders, if the business borrower uses a seller second or other secondary financing for a commercial mortgage, the business borrower can obtain a loan with a CLTV up to 95% of the property value.

Good Reason 10: Most banks or building societies require income verification or audits even after the commercial property loan closes. Non-bank or building societies small to medium business lenders do not verify income either before or after a commercial loan closes with a Stated Income Business Loan Program.

Good Reason 11: Most banks or building societies have strict guidelines for "sourcing" or "seasoning" of assets or ownership to qualify for a commercial mortgage. Most non-bank or building society small to medium business lenders do not have any requirements or limitations involving sourcing/seasoning of funds or seasoning of ownership.

Good Reason 12: Very few banks or building societies offer an assumable commercial property loan. Typical non-bank or building society small to medium business lenders have an Assumable Commercial Loan Program which includes loan amounts up to £1 million.

Good Reason 13: With most banks or building societies, a typical commercial property loan will require 3 to 9 months to close. At typical non-bank or building society small to medium business lenders, most commercial mortgage loans close in 45 to 55 days.