When It Comes To Commercial Property Loans, Your Banker is Not Your Friend !

You banker is not your friend. They will tell you what you want to hear and then stab you in the back when you do your loan with them.

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First of all, if you can even qualify for a bank loan, I want to tell you to beware. Learn as much as you can about the details presented in any loan offered. If the banker approves your loan for your business or investment property, (of which the chances of happening are very small), they will overcollateralize the loan. Bankers do something called cross-collateralization, which means they are going to take other properties as collateral if you have them. They're going to do UCC1 filings on your accounts receivable. This is actually a lien fellas! They're gonna do UCC filings which are lien filings on everything you own that's not titled. They're gonna take car titles. They're not even gonna tell you they're filing these liens and if you don't meet their loan covenant requirements for liquidity, banks can call your loan due and seize your property.

Banks hide certain financial requirements very deep down in the loan papers that you must meet and maintain along the way or they can call your loan due so far as to seize your property. These include credit, financial, profit & loss requirements that are often difficult to maintain. I can tell you many stories about this exact thing happening. Call me up! I can tell you many stories of our customers that came to us because their bank and call their loan due because their credit score dropped or their liquidity on their financial statement had been lowered. It's a scary deal folks!

Don't do it. Don't sign a bank loan!

Will Rogers once said or so I'm told (I didn't talk to him personally!) “A banker is someone will give you an umbrella on a beautiful sunny day and want it back when it rains.”

Don’t sign a bank loan on a commercial or investment property. If you must, be certain you know what you are up against. If you do it, understand there's very high risk. Now you're gonna get a lower interest rate at the bank than some of the other alternative lending products, but you the risk is so much higher of defaulting on a traditional bank loan as a borrower.

You want to look for a private alternative lender. You're gonna look for a lender that offers a 30 year loan that is a stand alone loan product where they don't want other collateral and they don't have loan covenants where they can call your loan due. The ideal commercial real estate loan looks like this: long-term amortization with no balloon payments, preferably with long period fixed rates. With an alternative loan like this, you're mostly protected in this kind of loan. Also, you want to always refinance or purchase a commercial property or investment property in a single purpose LLC. I'm not an attorney and I'm disclaiming that right now, but in my 25 years in the lending business I have learned that you want to always do your property loans as single purpose entities. Now talk to your lawyer about it. What they’re gonna tell you will be something a lot like this. A lawyer is gonna tell you this protects your assets outside of that LLC.

If you’re interested in obtaining a loan to refinance or purchase a business or investment property, apply with AMUSA Commercial Capital. You’ll be glad you did. Thanks for reading and I hope you have a great day. Remember, if it was easy, everyone would be doing it.

- Kory Stafford, CEO Amusa Commercial Capital