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Business Loan To Buy A Business - Golf Courses And Funeral Homes
By Stephen Bush
A business loan to buy a business involving either golf courses or funeral homes is among the most difficult commercial mortgage scenarios. Golf course financing and funeral home financing involve special complexities not found in typical business financing situations. In both cases refinancing is usually even more difficult than the commercial loan to purchase.

Reduction in Commercial Lenders - Golf Course and Funeral Home Financing

As a further complication for a difficult business loan for a golf course or funeral home, less business lenders are willing to offer competitive business financing terms. There has recently been a noticeable shrinkage in regional and local banks which offer commercial mortgage programs for golf course loans and funeral home loans.

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

Some regional and local banks will probably offer short-term business financing instead of a long-term business loan for golf course financing and funeral home financing. Another key term that can vary significantly is the percentage of value for the business financing. When buying or refinancing a funeral home or golf course business, it is of critical importance to avoid undesirable commercial loan terms, especially commercial mortgage conditions involving length of loan and percentage of value.

Stated Income Business Financing Difficulties

There are at least two critical problems in using a stated income business loan for either golf course financing or funeral home financing. The first major drawback of a stated income commercial loan is the maximum commercial mortgage loan that can be obtained. The second major drawback is the low percentage of value for stated income business financing. As a result of these significant restrictions, the use of a stated income commercial real estate loan is not recommended for a funeral home loan or golf course loan.

When

Commercial Real Estate Loan Value is Less Than Business Value

For golf course loans and funeral home loans, the commercial real estate loan value is often less than the business value. This is particularly true with a funeral home appraisal. The problem with this disparity is that many business lenders will provide a business loan that includes only the commercial mortgage loan value, and this will produce significantly reduced business financing.

Exorbitant Commercial Loan Fees for Funeral Home and Golf Course Financing

Business owners should be prepared for reasonable business financing fees during the beginning of the business loan process for golf course financing and funeral home financing. There are a number of business lenders that have chosen to take advantage of the shortage of commercial loan choices for building, purchasing and refinancing a funeral home or golf course. A common tactic is to charge excessive fees of $25,000 and more even if the commercial financing is not finished.

Funeral Home Financing and Golf Course Financing - Avoid Problem Lenders

As mentioned earlier, the supply of acceptable business lenders for this kind of business financing has been reduced. An agreeable commercial mortgage for a golf course loan or a funeral home loan will depend upon a wise lender choice.

It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier. A borrower seeking to buy a business should be prepared in advance for the limited number of acceptable business financing lenders for golf course financing and funeral home financing.

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

About Stephen A. Bush: Steve provides commercial real estate loan and working capital management advice. Free Commercial Mortgage - Working Capital reports
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