Alternative Business Loan and Commercial Mortgage Options
Commercial borrowers need to realize that they have more commercial loan options than they think. These business financing options are referred to here as "Thinking Outside the Bank" because most commercial borrowers believe that a bank is the best source for a commercial loan. Non-traditional business lenders are commonly considered to have the competitive edge for a variety of business financing situations.

In some cases a traditional bank will offer to provide a business loan but will attach excessively stringent terms and covenants. In other cases a traditional bank will decline the commercial mortgage outright, perhaps because they do not even provide business financing to the commercial borrower's particular industry. In either case, the commercial borrower is likely to benefit by "Thinking Outside the Bank".

Some business loan borrowers are likely to feel that a traditional bank is their best source for a commercial mortgage. However, because most traditional banks focus on a small number of established industries, non-traditional (non-bank) and non-local commercial lenders should be considered for most business financing situations. Therefore the recommended commercial loan strategy (as discussed in this article) is to "Think Outside the Bank".

As I described in a prior commercial loan report, in many business financing scenarios it is typical for a traditional bank to require more business loan covenants than would normally be seen in a competitive commercial mortgage situation. Traditional banks can unfortunately take advantage of a shortage of commercial lenders in their local market area.

A prudent response by business borrowers is to consider non-traditional commercial mortgage options. It is not necessary for borrowers to depend upon traditional banks for business loan strategies. For typical commercial loan scenarios, a non-bank lender can often provide better business financing terms because of the competitive market situation.

There are several business financing situations in which commercial borrowers will frequently find that non-traditional commercial lenders are better positioned to provide terms that are more advantageous to the commercial borrower: (1) commercial real estate loan programs; (2) business cash advance and credit card financing programs; and (3) credit card processing programs.

Commercial Loan Programs - Commercial Mortgage Business Loan Choices

Two of the most common commercial mortgage difficulties experienced by commercial borrowers can be avoided if they "Think Outside the Bank". The first business financing situation is the prevailing practice of traditional banks to avoid most special purpose properties (such as funeral homes and churches).

A second business loan possibility is the frequent practice of many commercial banks to add recall and balloon conditions to their commercial loans. The bank can then require early payoff of the commercial real estate loan under stipulated conditions. Both commercial financing situations can easily be prevented by a non-traditional lending source.

Working Capital Business Loan and Business Cash Advance Programs - Business Financing Alternatives

Business owners that accept credit cards will frequently qualify for a working capital business loan via credit card financing. Traditional lenders will often be very poor candidates to consider if a business needs help with a business cash advance.

Because successful business owners typically need more working capital than they can obtain from a bank, it is important for a business to "Think Outside the Bank" with non-traditional lenders to help with this working capital management function.

Business Loan Options - Credit Card Processing Programs

The selection of a credit card processing service can be critical in improving the cash flow of a business with significant credit card activity. Credit card processing providers can be combined with the credit card financing process mentioned earlier.

In managing a merchant cash advance program, it is often possible to obtain a significant improvement in credit card processing activities. It is probable that a non-traditional lender will be the key source of effective help with credit card processing because traditional banks are usually not competitive in providing assistance with credit card financing.

A closing commercial financing comment: I have published a previous commercial loan report about business lenders to avoid. I want to emphasize that there are traditional and non-bank lenders which should be circumvented.

Because of this, when commercial borrowers "Think Outside the Bank", they must be prepared to anticipate some ineffective non-traditional commercial lenders in their attempt to find better commercial financing involving credit card processing management, commercial mortgage loans and business cash advance programs.