Business Loan to Buy a Business - Golf Courses and Funeral Homes

By: Stephen Bush


Funeral home loans and golf course loans involve difficulties not found in common business loan situations. A commercial loan to buy a business for a golf course or funeral home is among the most difficult business financing scenarios, and refinancing will probably be more difficult than the initial commercial mortgage purchase loan for buying the business.

Funeral Home Financing and Golf Course Financing - Fewer Commercial Lenders

There has been a significant reduction in local and regional banks offering business loan programs for funeral home financing and golf course financing. This of course compounds the already difficult commercial loan environment for funeral homes and golf courses due to fewer commercial lenders which are willing to provide reasonable commercial mortgage terms.

Business Opportunity Financing to Buy a Business

Business financing to buy a business opportunity is a special business loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find.

Avoiding Problematic Commercial Mortgage Terms

It is critical to avoid undesirable business loan terms when refinancing or buying a funeral home or golf course business. Particularly important terms involve the percentage of value for the commercial mortgage and the length of the commercial loan. Regional and local banks will frequently offer short-term business financing instead of a longer-term commercial loan.

Stated Income Business Financing Difficulties

Although a stated income commercial loan has a certain number of benefits in specific circumstances, the use of stated income business financing is not recommended for a funeral home loan or golf course loan. A major limitation of a stated income commercial mortgage is the maximum business loan possible. A further limitation is the low percentage of value for stated income commercial financing involving either golf course financing or funeral home financing.

Business Loan Difficulties - Commercial Mortgage Loan Value and Business Value

Some commercial lenders will offer a commercial loan that reflects only the commercial real estate value, and this will result in a reduced business loan. For golf course financing and funeral home financing, the business value is often more than the commercial property value. This will almost always occur with funeral home appraisals.

Exorbitant Commercial Loan Fees for Funeral Home and Golf Course Financing

There are business lenders that are taking advantage of the limited commercial mortgage loan choices for refinancing, purchasing and building golf courses or funeral homes. Business borrowers for funeral homes and golf courses should not be concerned by reasonable and legitimate business loan fees during the early business financing process. One of the unnecessary and unacceptable lending tactics involves excessive fees (generally more than $20,000) even if the commercial loan is not successfully completed.

Commercial Lender Options for Funeral Home Loans and Golf Course Loans

Successful business financing for either a funeral home loan or golf course loan will depend upon an appropriate choice involving the commercial lender. As noted above, the number of viable commercial lenders for this specialized type of commercial mortgage is rapidly shrinking.

The practical reality is that a commercial borrower should be prepared for the limited choices of truly qualified lenders for a business loan to buy a business involving funeral homes or golf courses. It becomes essential to choose a lender with the capability to successfully complete the required commercial loan process and simultaneously avoid the business financing problems described above.

Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.

Article Source: http://www.articleyard.com


Information about the Author:

About Steve Bush: Stephen provides candid commercial mortgage loan advice. Free Working Capital - Credit Card Processing reports from AEX Commercial Financing
You can get a unique content version of this article.