Commercial Lending in Texas
Commercial lending in Texas covers a wide variety of financing options. These include things like business loans, commercial real estate funding, as well as business credit. Depending on your needs, commercial lenders in Texas have financing products you’ll need. So, read on to learn more about commercial lending in Texas and beyond.
Commercial lending in Texas, like in the rest of the nation, provides critical capital for businesses, whether they’re established, startups, or entrepreneurs. Commercial lenders offer different types of financing, most often tailored to specific situations, such as real estate, retail, industrial, equipment, and much more.
How Commercial Loans Work
Commercial loans work quite a bit like other types of loans. For instance, most have set terms, along with fixed period installment payments. Rates will vary depending on the lender and competition among lenders. Also, some lenders will require collateral, while others may require a down payment. Eligibility will also vary between lenders, but most will have minimum creditworthiness guidelines.
Types of Commercial Loans in Texas
Fortunately, there are several types of commercial lenders. These include small business loans, such as SBA loans, commercial real estate loans, and different types of credit:
- SBA loans. The Small Business Administration sets the standards for different types of commercial financing. There’s the 7a SBA loan, which can be up to $5 million, with terms ranging from 10 years up to as long as 25 years. Rates are based on the going interest rates of the time and are generally competitive. The 7a can be used for working capital, inventory, or equipment. Meanwhile, the SBA 504 loan is purchasing a building, buying land, new facility construction, remodeling an existing building, machinery, or refinancing an expansion.
- Commercial real estate loans include such financing as hard money loans, bridge loans, construction loans, blanket loans, and more. Hard money loans are made available through a group of private investors, while bridge loans are short term loans, and construction is for building new or improving or renovating an existing building. Blanket loans are for owners of multiple properties, giving the owners the ability to convert multiple loans into one.
- Business lines of credit include things like commercial credit cards, lines of credit, and vendor credit. The amount of credit, along with the interest rates, are determined by individual lenders or banks or credit unions and might be used for a variety of business needs.
Texas Church Loans
Texas church loans come in different varieties, meaning different structures, amounts, and terms. Fortunately, this can be of great service to your ministry, being able to choose the right type of loan for your assembly. Of course, the types of dead instruments available for ministries differ somewhat from conventional commercial enterprise entities. However, they aren’t so different or complicated, or even more difficult to obtain. In fact, some would say that your organization is in a better position to obtain financing than regular corporate businesses. Read on to learn more about Texas church loans and what you need to know.
Texas church loans come primarily in three to six different forms. These include, but are not necessarily limited to short-term, long-term, and unsecured. Additionally, financing is generally available in one of the following forms: new construction, refinancing, and remodeling.
What this means is that there is a type of funding that will best fit your individual circumstances and needs. For instance, short-term loans are ideal for small acquisitions, such as purchasing real estate. Long-term loans are also fit for this purpose, obviously though, for large pieces of real property. Meanwhile, unsecured loans can serve a variety of purposes, though these are generally limited in their net lending amount.
Then, there are financing options to build new construction, remodel an existing church or commercial space, or to refinance an existing mortgage on the property. So, if your ministry is growing and needs additional space, a remodeling loan to add on to an existing structure might suffice. However, if that isn’t sufficient, you might need financing for entirely new construction.
Now, let’s get into some more details about the actual nuts and bolts of the funding options. You might be asking how much your ministry can borrow, and that of course, is a legitimate question. Generally speaking, churches are able to borrow four times their gross offerings and tithes. Although churches are able to borrow up to six times their offerings and tithes. Regardless if it is four or six times those amounts, the most churches can typically borrow is four to six times of said tithes and offerings, minus or less operating expenses.
Documentation that is needed for church loans is different from that of regular commercial businesses. Generally speaking, a profit and loss statement or statements, along with some ordinary documentation about donations and gifts, along with cash on hand, will be sufficient. Obviously, this will depend on the specific lender, which will tell you precisely what’s needed.
Texas Apartment Loans
Texas apartment loans. Fortunately, there are many options to choose from. If you’re interested in buying — or even building — a commercial or multifamily property, you’ll need the right type of financing. Of course, there are variables here. In other words, the down payment amount, the interest rate, collateral requirements, and more will differ from one product to another. So, read on to learn more about Texas apartment loans.
Texas apartment loans are offered through federal government programs, by private lenders, and big-name commercial lenders. So, you are limited to just one or a few. Instead, there are several ways to go to buy a multifamily property or to build a new commercial building. Here are the five most well-known apartment loans available in Texas and beyond:
- Fannie Mae Apartment Loans. This federal loan program allows investors to borrow as little as $750,000 with loan terms that can last up to 30 years. Fannie Mae’s commercial funding options include both conventional loans and especially loans, such as affordable loans, green financing, senior housing, and more. Usually, borrowers are required to put down 20 percent or more. As for interest rates, these tend to be competitive with commercial lenders, in order to attract more business and add to the overall portfolio.
- Freddie Mac Apartment Loans. This type of loan program ranges from $1 million up to $100 million for commercial property investments. There are several loan types available through Freddie Mac, including conventional loans, small balance loans, targeted affordable housing financing, senior housing, and more. Like the one above, loan terms can last as long as 30 years, and typically requires a down payment of 20 percent or more. Also, interest rates are quite competitive.
- Bank Balance Sheet Apartment Loans. Instead of going with a government-backed package, it’s also possible to get a commercial loan that is entirely in-house from the lender. Of course, this means the borrower will need to have a strong credit rating and commit at least 20 percent or more to a down payment. Interest rates will vary and loan terms, or the number of years, will also vary from lender to lender when it comes to balancing sheet loans.
Finally, there are two more options. One is an FHA apartment loan, which is for the purchase of existing properties. These loans generally start around $3 million and require about 20 percent down, with a loan term of up to 35 years. Another is an apartment construction loan. These are available from national lenders and rates, terms, and other requirements will differ from one to another.
Texas Rehab Loans
Texas rehab loans come in several different forms. (Actually, there are three major types, but these can be broken down into different structures, which serve different purposes, expanding the number of options of residential rehabilitation home loans.) The great thing about rehab loans in Texas, and other states across the country, is the fact that they allow people to get into a residence for less and customize it to their liking. Additionally, some rehab loans in Texas allow investors to completely remodel and invest property and flip it or rent it out. Read on to learn more about Texas rehab loans and what you need to know.
Texas rehab loans, as stated above, are usually offered through one of three programs, there’s one offered by the Federal housing administration or FHA, another by Fannie Mae, and yet another via Freddie Mac. While all of them are for rehabilitation purchases at large, they do differ in their terms and conditions, meaning they don’t apply to every situation. For instance, some can only be used on a primary residence, while others can be used to remodel a second home or investment property. Also, these rehab loans may or may not allow for the purchase of a primary residence and remodeling of said property, while others are strictly for makeovers only. So, you’ll have to do your homework in order to find the right fit. Here are the three major types of rehab loans you’ll find in Texas and beyond:
- The FHA 203k loan.
- The Fannie Mae HomeStyle loan.
- The Freddie Mac CHOICERenovation loan.
While all three renovation loans are similar, covering major and minor makeovers alike, they do serve different purposes. For example, the FHA 203A loan requires a credit score ranging from 500 to 580, with a down payment between 3.5percent and 10 percent, and can only be used on primary residences.
However, the Fannie Mae HomeStyle loan may be used to purchase a primary residence, rental property, or investment property, and requires a credit score of 620, with a down payment ranging from 3 to 5 percent. Meanwhile, the Freddie Mac CHOICERenovation loan is intended for improvements that are permanently affixed to the property, which makes it broader, and could be used for something like putting in a swimming pool.
As you can plainly see, there are different types of Texas rehab loans to choose from. Of course, you’ll need to speak with a loan specialist in order to determine the right one for your particular situation.
Texas Construction Loans
Texas construction loans come in several different structures. Meaning, they are each intended for rather specific purposes. However, not all construction loans are customized for certain types of projects, some are just general purpose financing. That means there’s a loan product for almost everyone, regardless of circumstances. Read on to learn more about Texas construction loans and what to expect with this type of financing.
What is a Construction Loan and How Does it Differ from a Mortgage Loan?
The difference between these products is very basic. A construction loan is for just that — building or even refurbishing — a residential home or multifamily unit(s). Conversely, a mortgage loan is for purchasing an existing property. (Although, it can help to fund a remodeling project.)
Also, another difference is that construction loans are short-term financing. These only last as long as it takes to complete the build. Then, the borrower must convert or obtain a mortgage loan. So, construction loans can last in terms of just six months, up to a year, or more. Meanwhile, mortgage loans generally last from 10 or 15 years up to 30 years.
How Do Construction Loans Work?
Here’s another key difference — a construction requires an actionable building plan, complete with all the details. In other words, a construction loan requires cost estimates. Additionally, it requires a certain amount of creditworthiness, demonstration of being able to repay the loan, and other documentation.
Texas Construction Loans
Now, there are different types of construction loans. Keep in mind that there are more available, but these are the most common. We’ll start with a construction-only loan — which is exactly what it sounds like — it only covers the cost of the building. Put another way, it will pay for the financing of the actual house or building, but that’s it. After completing the residence or building, the borrower will have to obtain another loan.
There’s also an owner builder construction loan. Just like the one above, it’s fairly self-explanatory — the borrower acts as the contractor and does not pay a third-party professional builder. However, these types of construction loans are generally reserved for individuals with demonstrable construction experience.
Renovation loans are also pretty straightforward — they are for remodeling an existing property, not building something entirely new. These are sometimes referred to as fix and flip loans or fixer-upper loans.
Lastly, there’s a construction to permanent loan. It pays for the building of the property and converts to a regular mortgage after completion.
Who is Eligible for an SBA Loan?
Who is eligible for an SBA loan? Well, that’s a great question. And, one that comes up very often. While some small businesses and startups have the resources to fund their enterprises nearly entirely independently, the vast majority must rely on financing. Small business loans are the most widely used medium to obtain funding for a variety of expenses. These include procuring real property, inventory, equipment, and hiring employees. Read on to learn more about who is eligible for an SBA loan.
What is an SBA Loan?
First, let’s begin with a basic understanding of what an SBA loan is (and isn’t). The United States Small Business Administration has a lending program that it oversees. But, the US State Small Business Administration does not directly lend money. Instead, it relies on various lending institutions, including national banks, regional banks, credit unions, and others.
Types of SBA Loans
There are several types of SBA loans. These include a Standard 7(a) loan, a 7(a) Small Loan, an Express loan, 504 loans, microloans, disaster loans, and more. These loans are intended for different reasons. Some are for the purchase of commercial real estate, others are for refurbishment, while others are for purchasing equipment, and more reasons.
Who is eligible for an SBA loan? Basically, there are just a few qualifications for who can take out an SBA loan. The borrower’s net income must not exceed $5 million and that’s after paying taxes and does not include carry-over losses. Also, the company cannot earn more than $7.5 million in annual revenue in the past three years. Additionally, the organization cannot have five hundred or more employees. The last stipulation is that net worth must be under $15 million.
As you can see, there are some restrictions on who can qualify for an SBA loan. But, these are really meant for small businesses (and even medium-sized businesses). However, this is not an exhaustive list. There are other requirements and stipulations. For example, most SBA loans require some form of collateral. And, might or might not also mandate a personal guarantee.
Although, the borrower is not solely responsible for the entirety of the loan, should the business fail? After all, these loans are backed by the federal government. Still, it’s very important to understand all the terms and conditions before applying for and accepting a small business loan.
Texas Hard Money Loans
Texas hard money loans, sometimes referred to as fix and flip loans, bridge loans, and even as asset-based or asset back loans, are a type of financing for procuring a residential or commercial real property, such as single-family residences, multi-family units, or commercial buildings. Read on to learn more about hard money loans.
Texas hard money loans are a type of capital funding that is made available, usually by a pool of private investors, rather than through a traditional lending institution, such as banks and credit unions. These can be found throughout the lone Star State and used for a variety of purposes, but most often are related to real estate transactions.
What are Hard Money Loans?
As briefly mentioned above, hard money loans are an alternative to traditional commercial financing, which is lent through a bank or credit union, or even specialty lenders. Instead, hard money loans, from private investors who group their money together in order to obtain a return on investment.
How Do Hard Money Loans Work?
Hard money loans, also known as bridge loans, asset-backed loans, and fix and flip loans, are a type of financing that is used to purchase and rehabilitate residential or commercial properties.
But, rather than having long terms, these loans are much shorter, lasting as little as 6 months, but up to 18, 24, and sometimes a bit longer. Most, however, only last half a year up to a year or just a bit longer. Interest rates are generally competitive with traditional commercial loans, but these offer much flexibility in repayment installment amounts and other elements.
Advantages of Hard Money Loans
Of course, as with any type of financing, there are pros and cons to hard money loans. Here are some of the advantages of hard money loans:
- Quick funding. Unlike traditional commercial lenders, hard money loans I have a long reputation for making funds available in a very short amount of time. This is due to the fact that these do not require all the bureaucracy and red tape of traditional loans.
- Flexibility. Hard money loans offer much more flexibility than traditional commercial financing, which comes with many restrictions. As previously mentioned, hard money loans have a number of customization elements, which means that borrowers are able to set their own terms.
- Leverage. Because of how hard money loans work, borrowers need not put up their own cash to secure them, making them ideal for short-term financing.
Texas SBA Loans
Texas SBA loans (as with the many other states) come in various forms. Some are intended for start-up companies, while others are for newer businesses, and still, others are for established companies. There are even SBA loans for rebuilding businesses, particularly for rebuilding or rehabilitating commercial properties, or for expanding or saving struggling businesses. Read on to learn more about Texas SBA loans.
Texas SBA loans are of course, for small businesses, which means for companies that are not medium to large-sized. While that’s a bit vague, it typically applies to companies that have less than so many employees and earnings of less than a predetermined amount.
Texas SBA loans are commercial debt instruments that provide financial assistance or funding for companies up to $5 million (though these can be substantially less). What’s most important to know is that the Small Business Administration does not directly provide loans. That is to say, the government itself doesn’t lend money to businesses. Rather, banks and other financial institutions lend money but adhere to federal guidelines. Here are the most common SBA loans available in Texas:
- 7(a) loan program. This is a loan that is backed by the United States government, up to $5 million. The funds can be used by borrowing businesses for things like working capital, buying equipment, or to expand. The 7(a) loan program is available at national banks, regional banks, credit unions, as well as specialty lending institutions.
- 504 loan program. These SBA loans are also government-guaranteed and can go up to $5 million. Businesses can use funds for purchasing unimproved properties or vacant land, buy machinery, or acquiring facilities. These loans are available through private lenders, along with nonprofit organizations.
- Microloans. Generally, these SBA loans are $50,000 or less and used to purchase inventory, equipment, working capital, or even to start a business. These loans are available through community-based nonprofit organizations.
- SBA disaster loans. These SBA loans go up to $2 million and are for businesses that have been affected by natural disasters or other types of emergencies. Unlike other SBA loans, these are processed through the Small Business Administration.
Terms and rates vary depending on the type of SBA loan but range from 5.5 percent up to 7.5 percent. Generally, loans over $50,000 can range from 5.5 to 6 percent, while smaller loans will range from 6.5 to 7.5 percent.
Texas Commercial Fix and Flip Loans
Texas commercial fix and flip loans are a way to either enter or continue on the real property investment journey. These loans come in different types and structures with various rates and terms. Generally speaking, these are short-term loans, because of the nature of the property transaction. Read on to learn more about Texas commercial flip and fix loans and what you should know.
Texas commercial fix and flip loans Are a great way to acquire and renovate a commercial property in order to sell it for a decent profit. Unlike traditional commercial real estate loans from big Banks, fix and flip loans come from different sources.
For instance, one of the most common types of commercial fix and flip loans in the Lone Star State or what’s known as hard money loans. Rather than coming from a traditional Kama national Bank chain, these debt instruments are funded by private investors. Said investors pool their money together in order to realize a quick return-on-investment. Meaning, there’s practically no red tape or bureaucracy to deal with.
Hard money loans generally offer competitive interest rates, with loan terms ranging from 12 months up to 18 months, and sometimes longer. Additionally, it’s possible to find even shorter-term arrangements, for certain deals.
Another option for commercial fix and flip loans is a structure known as cash-out refinancing. This is for existing commercial property owners, who have between 30 and 40 percent available equity in their real property assets. it gives them the opportunity to rehabilitate and remodel a commercial building, and then sell it for a higher price than it would otherwise bring in its current condition.
Commercial property owners can also take advantage of an investment property line of credit. As the name implies, this is for commercial property owners, who lease their space to businesses. It’s somewhat similar to the loan type mentioned above, and generally requires equity of at least 30 percent.
Yet another option is to go through a traditional banking institution, to obtain a commercial loan. This can come in the form of a commercial mortgage, or a refinance type deal. However, these loans are generally a bit more difficult to obtain, and usually require collateral, as well as a personal guarantee.
Some commercial property investors take advantage of bridge loans, which are also short-term, but even shorter than hard money loans, which can be as little as 6 months, in order to bridge the gap between now and later, when a longer-term debt instrument replaces it.
Hotel Financing Types
Hotel financing types typically come in one of four forms. These products are usually specialized for such large commercial ventures. Unlike acquiring other kinds of real commercial property, such as retail space, industrial space, hospitality differs a bit. Fortunately, there are various loan types available for financing a hotel purchase. Better yet, these typically offer good terms, including long repayment schedules, and competitive interest rates. Read on to learn about hotel financing types and what you can expect.
Types of hotel financing generally come in four different arrangements. These financing models are mostly tailored to the acquisition of hospitality space making them an ideal fit. These include, but are not necessarily limited to, conventional commercial bank loans, SBA 7(a) loans, SBA 504 loans, and USDA B&I loans.
These four different types of hotel financing can be obtained at interest rates varying between 5 percent and 9 percent, with terms generally extending up to 25 years. However, this is a general rule of thumb, as some lenders will offer more affordable rates and/or shorter or longer terms. For instance, investors might be able to secure a hotel loan with a lower interest rate, combined with a shorter repayment cycle.
Of course, it is important to shop around and compare different products in order to find the best fit. Now, here’s a quick look at hotel financing types:
- Conventional commercial bank loan. Perhaps among the most familiar, is the traditional commercial Bank loan. This type of hotel financing is generally offered by the larger banking firms, with rates ranging from 5 percent up to 9 percent, although some institutions do offer lower and higher rates. Terms for commercial bank loans can be as short as 10 years, up to 25 years.
- SBA 7(a) loans. These types of loans are typically used to purchase an existing commercial business, and generally top out at $5 million. So, these are most often used to purchase an existing hotel already in full operation.
- SBA 504 loans. These types of loans are designed to purchase many types of hard or fixed assets, such as commercial real estate, including hotels. However, one requirement for this loan is to obtain said asset at a below-market-rate. Meaning, this would mostly apply to existing hotels that are financially troubled and need to turn around the assistance.
- USDA B&I loans. The Business and Industry Guaranteed Loan Program is for rural environments. In other words, this loan is restricted to real commercial property located in rural areas, intended to boost the local economy by providing more local jobs.
San Antonio Real Estate Forecast 2020
The San Antonio real estate forecast for 2020 will probably bring a bit more balance to the market. Currently, it’s a very hot market that looks like it will cool somewhat in the coming months. With that change, it ought to help buyers and even be beneficial to sellers, alike. Read on to learn more about the San Antonio residential real estate market forecast for next year.
The San Antonio real estate forecast for 2020 will most likely rein in a community that’s experienced a heavily active market. Now, while that’s ostensibly advantageous for sellers, while not as good for buyers. However, there are signs the market will return to a more balanced one going into mid to late 2020.
Located in south-central Texas, San Antonio is most well known as being the home of the Alamo. It’s also home to SeaWorld San Antonio, a local favorite known as River Walk, and the HemisFair Park Tower of Americas.
The community of San Antonio is an active and growing one, with various industries either relocating or establishing presence in the area. Employment opportunities are strong and housing prices are some of the most affordable in the region.
Right now, the median house value in San Antonio stands at $179,000. Home values have increased in the area by 4.5 percent over the course of the past year and industry experts forecast another gain — although less dramatic — of 2.7 percent over the course of the next year.
Meanwhile, the median list price per square foot in the community of San Antonio $123, lower than the larger metro area average of $130. Additionally, the median list price in the city of San Antonio stands at $239,700.
At this time, the median rent price in San Antonio is $1,300 per month, which is slightly below the metro average of $1,350.
Mortgage delinquency rates are low in the area, being 1.6 percent, just a bit above the national average of 1.1 percent.
All of this points to a market shifting away from a community that’s in the midst of a sellers’ market to a more balanced one. As home values won’t rise as much and more potential distressed properties coming onto the market, it should lay the groundwork to bring the market back to the center. This is why San Antonio is a great place to look for a home next year.
About San Antonio Fix and Flip Loans
San Antonio fixes and flip loans — otherwise known as hard money loans — are an ideal capital source, particularly for property investors. When it comes to residential property investment — be it for single-family residences or multifamily — fix and flip loans can help tremendously. Read on to learn more about what you need to know about fix and flip loans in San Antonio and beyond.
San Antonio fixes and flip loans or hard money loans are a very useful type of financing. This is especially true for short-term investment opportunities because there’s a bunch of advantages.
Located in south-central Texas, San Antonio is best known for the historic location of The Alamo. It’s also home to the San Antonio River and the very popular River Walk. It’s likewise home to SeaWorld San Antonio, Six Flags Fiesta Texas, and Morgan’s Wonderland.
San Antonio is a great town, which is very family-friendly. With a population of about 1.5 million, it’s a relatively small town but still large and modern enough.
Right now, the median home value in the city of San Antonio is $179,000, with values rising by 4.5 percent over the course of the past year. Experts predict home values will continue to increase by 2.7 percent over the next twelve months. And, that presents a real opportunity for real estate investments. So, let’s take a quick look at a fix and flip loans.
Benefits of Fix and Flip Loans
Fix and flip loans are a great way to finance the purchase and/or the rehabilitation of a property. (That, by the way, is one of the biggest advantages of fix and flip loans, as these can usually be used for any type of property.) Here are some more benefits of fix and flip loans:
- Short term financing. Instead of having to take out a 15 or 30-year mortgage, you can go with a hard money loan and get the funding in a very short period of time.
- Easier credit requirements. Generally, the credit requirements for fix and flip loans are much lower than with traditional bank loans.
- Fast funding. Again, fix and flip loans — because they are short term arrangements — are funded quickly. This way, you can get into the property faster, make necessary improvements, repairs, and upgrades, and then turn around right away and sell it for a profit.
How Do Hard Money Loans Work?
How do hard money loans work? It’s a very common question to a niche product. Hard money loans work in much the same way as traditional loans in the transactional sense. However, the underlying logistics are quite a bit different. That is to say, these are structured in a unique way. Read on to learn more about how hard money loans work.
How hard money loans work is really up to the individual lender, or group of lenders. But, in general, hard money loans, which are short-term financing arrangements, pretty much all work in the same way overall.
What are Hard Money Loans?
The first thing we need to answer is what hard money loans actually are. Hard money loans are a form of commercial financing, usually used in real estate transactions, with funds supplied by a group of private investors.
These investors pool their money together to lend out, typically for commercial ventures. Unlike traditional loans from banks, hard money lenders have a different set of lending standards. And, these standards are generally looser than traditional lenders but this does not mean there aren’t any requirements.
How Hard Money Loans Work
Borrowers apply for hard money loans similar to the way they would when applying from a traditional lender. However, this is where the similarities end and the differences begin.
Hard money loans generally require collateral and or a larger down payment. (Usually, this is something like real property.) Additionally, hard money loans come with higher interest rates than traditional loans.
The benefits of hard money loans are these have shorter terms, which can be customized for the borrower, generally no penalties or fees attached, and funding is much quicker than traditional loans.
For instance, the term lengths can run from as short as six months to twelve months, up to twenty-four or thirty-six months. This is due to the fact the purchase or project at the center of the loan is a quick turn around. In other words, a flip is a prime example.
This makes hard money loans particularly ideal for property developers, commercial Real estate investors, and similar individuals. Basically, hard money loans are a great alternative for real estate developers and property investors because they allow these individuals to enter into more deals with less capital upfront.
As you can see, hard money loans are a smart way to finance commercial purchases without the hassle of going through traditional banks.
Commercial SBA Loans in San Antonio
Commercial SBA loans in San Antonio come in different forms. Small to large, with various kinds of repayment terms, and other elements. But, this is good news for companies who are either starting out or need new cash to grow bigger. Simply put, the more options, the better because it means being able to find the best fit possible. Keep reading to learn more about what you need to know about commercial SBA loans in San Antonio.
Commercial SBA loans in San Antonio can help businesses reach new potential. But, there are some things you need to understand about commercial SBA loans in San Antonio and other locations.
Commercial SBA Loan Basics
Unlike applying for a regular loan, like for a car or even a house, a commercial SBA loan is very different. Sure, it’s for a commercial or enterprise application — that’s obvious. But, there are more differences.
First and foremost is the fact the United States Small Business Administration does not lend businesses money. Yes, you read that last sentence correctly. The SBA doesn’t lend businesses money. However, it does provide banks and other financial organizations with standards and guidelines.
Commercial SBA loans are for small businesses and small businesses only — not for large companies. Loan amounts can go up to $5 million, but most are significantly smaller in amount. Commercial SBA loans range from only a few years, up to a decade or as much as 25 years. In fact, most commercial SBA loans which are the longest are typically for commercial real estate purchases.
Also, repayment installments are made by the borrower on a monthly basis. Generally, funds are made available to the borrower within 30 to 90 days. However, this is just a rule of thumb, as some loan products might differ.
Commercial SBA Loan Eligibility
What most business owners are most interested in knowing is what are the requirements for obtaining a commercial SBA loan. Here’s a short list of what’s needed to be eligible for an SBA loan:
- The business must operate in the country.
- The company has to be for-profit.
- The business must be in an eligible industry.
- The main borrower must have equity in the business.
- The business can’t be too large, with too many employees and too much annual revenue.
As you can see, commercial SBA loans are fairly straightforward and can help small operations achieve big goals.
San Antonio Construction Business Loans
The construction business is a tough but rewarding one. It can lead to financial security for those who plan effectively and execute with wisdom along the way. Financing is a big part of walking the road to success. So, let’s take a look at some San Antonio construction business loans and what to expect.
San Antonio construction business loans are not all that dissimilar from other types of commercial financing. Just like with a retail shop, a professional services practice, or other enterprises, accessible capital is often a necessity.
Fortunately, there are a number of options for construction business loans in San Antonio and beyond which can help building firms of all sizes through several phases of the business growing.
We’ll start off with one that comes in handiest for new construction businesses — equipment financing. After all, the equipment is the backbone of any building firm. These loans differ from lender to lender. But, in general, loans can pay for 100 percent of the purchase costs. The equipment bought then serves as collateral for the loan.
Next, are business lines of credit. These are suitable for many industries, not just construction. But, business lines of credit for construction companies are usually a good fit for firms that are in the process of growing. The lender will approve funds up to a certain amount and borrowers can then take out money at any time, for practically any legitimate business expense. Business lines of credit are helpful for construction companies because only the interest is paid. Plus, this type of financing is available in both secured and unsecured forms.
Of course, many people have heard about SBA loans or more particularly, SBA 7(a) loans. Contrary to popular conception, these do not come from the Small Business Administration. But rather, through local, regional, and national lenders. However, these are insured by the federal government. There are certain restrictions to note. For instance, SBA loans are for legitimate expenses, such as purchasing equipment and for working capital.
Short term loans are also an option. These usually come from private lenders or a group of private individuals. Hard money loans are an investment opportunity for some while providing funds for companies in commercial capacities.
It’s important to understand that most construction company loans will require a minimum credit score and a number of years in business. Collateral might also be necessary to obtain approval for certain construction business loans.
San Antonio Commercial Real Estate Market
The San Antonio commercial real estate market is most definitely on the rise. It’s more or less booming, at least according to the latest headlines. And, this news isn’t hype, either.
The San Antonio commercial real estate market, like its residential counterpart, is showing all the signs of significant growth. Which means an improved microeconomy for the area and more positive influences. So, let’s take a look at the San Antonio commercial real estate market and what’s going on right now.
The San Antonio commercial real estate market is enjoying a real surge at the moment. But, it’s not crazy and unsustainable. In fact, it’s the kind of dynamic and growing city that would welcome.
One positive sign is commercial rents are on the rise. This means there’s more opportunity for commercial real estate investors. And, for businesses looking to get in on present costs before increases hit over the coming years.
Another bit of awesome news about the San Antonio commercial real estate market is found in recent permit filings. In May of this year alone, San Antonio’s commercial construction permits totaled an astounding $200 million.
There is a slew of commercial transactions and happenings going on at this time. For example, there’s a new major auto dealership and newly adopted land-use plans mean favorable news to mixed-use buildings in the midtown area.
Additionally, multifamily apartment buildings are benefiting hugely from $10 million in renovation money from the state.
All of this, plus a recent report has named San Antonio a top market for retail investment.
Then, there’s the matter of office rents, mentioned earlier. Office rent rates in San Antonio are increasing, even though vacancies are also going up at the same time.
Furthermore, more national, regional, and local companies are coming into the area. That too, makes the San Antonio commercial real estate market even more healthy.
Overall, the San Antonio commercial real estate market is doing very well. Companies are choosing to either relocate here or to establish a presence. In either case, that means San Antonio will benefit.
With so much going on at one time, it’s hard to pinpoint just one factor that’s making the San Antonio commercial real estate market so attractive. But, given the city’s location, its affordability to employees, and its overall appeal, it’s little wonder why businesses are moving here. Meaning now is the time to explore the San Antonio commercial real estate market further and take action.
San Antonio Construction Loan Types
San Antonio construction loans can really help developers and others get projects underway and completed. In fact, construction loans are often a preferred choice of builders since they have a variety of tangible advantages.
When looking for construction loans in San Antonio (or elsewhere), it’s very important to understand the basics. And, you’ll quickly learn just why construction loans are an ideal lending solution.
So, exactly what are construction loans?
Generally, there are a few different types of construction loans. The types of construction loans are based on the needs of the owner or developer/builder.
For instance, if a single person or family is building a home, that person or family might take out a construction loan known as a construction to permanent loan. This type of loan finances the construction of a hay house and then converts to a mortgage after the home is built.
Another type of construction loan is called a stand-alone construction loan. This type of financing can be used by an owner or a builder. As the name implies, finance is only the construction of the building oar House and a separate loan is necessary thereafter.
Biggest Construction Loan Benefits
Generally, builders seek construction loans in order to finance the building of a residential home, retail space, or commercial improvement. Construction loans are ideal for these types of projects, which is why builders so often choose them as a funding source.
There are actually numerous advantages to construction loans but the most beneficial are the following:
- Non-traditional. its well-known banks are notorious for bureaucratic red tape. it can easily take several weeks, even months to go through the process of obtaining a traditional loan through a commercial bank. Conversely, construction loans are offered by a variety of lenders, making them more available and easier to obtain.
- Quick funding. Since construction projects are done on a short-term basis, construction loans are tailored to fit their timelines. This means quicker funding in order to meet the needs of a builder or an owner.
- Flexible terms. It’s common for lenders to offer flexible terms for construction loans. With construction loans, it’s often possible to get more flexible terms, including rates and loan length to suit individual needs.
- It helps define plans. As anyone in the construction industry knows, changes to plans cost an inordinate amount of time and money. Another big benefit to a construction loan is having to provide plans ahead of time. This greatly assists with defining the plans and the building timeline.
Hard Money Loans for Real Estate Investments
Hard money loans for real estate investments are one way to fund acquisitions with far less red tape and more attractive terms. In fact, hard money loans are a great alternative to traditional commercial lending. These provide a different way to back the purchase of a commercial land parcel, developed multi-use properties, multifamily buildings, and other types of real property.
Hard money loans for real estate investments usually offer more attractive terms and conditions. The reason for this is the source of funding, which does not come from traditional banks. When investing in real estate, whether residential or commercial, it’s very important to understand all financing options.
Hard Money Loans Explained
So, what exactly are hard money loans? You’ve probably heard the term before. Even if it’s new to you, it shouldn’t be confusing. Hard money loans are a form of short term financing, provided by a private group of individuals. These pooled investors are not part of a bank and therefore, their combined capital is used for a variety of investment opportunities.
Simply put, a group of individuals pool their money together and loan it for a whole host of reasons, including real property financing. This is very beneficial because it means not having to deal with the bureaucracy of a traditional bank.
Biggest Benefits of Hard Money Loans for Real Estate Investments
Now that we’ve explained what hard money loans are, let’s take a look at their advantages:
- Quick funding. Unlike traditional bank loans for real estate purchases, which can take weeks or even months, hard money loan funding happens comparatively very fast. This is due to the fact there’s no real red tape and bureaucracy to deal with, slowing down the process. And, since it’s provided by a group of private individuals who are motivated to loan money in order to gain a return.
- Flexible terms. Another benefit of hard money loans is these have flexible terms that borrowers can usually customize according to the needs of the transactions.
- High approval rates. We’re all aware of how difficult it is to obtain a commercial real estate loan from a traditional bank. But with hard money loans, the rates of approval are much higher. Meaning, greater chances of receiving financing.
- No or minor prepayment penalties. Yet another attractive component to hard money loans is these generally do not contain prepayment penalties. Or, have relatively small prepayment penalties, unlike traditional real estate loans.
SBA Loans for Startups
SBA loans for startups? This is a tricky subject because it’s a misnomer. The SBA or Small Business Administration doesn’t actually lend money. Yes, there are technically SBA loans, but probably not in the way you think. SBA loans are actually obtained through various sources, not through the SBA itself.
SBA loans for startups come in different shapes and sizes. These aren’t just cookie-cutter package programs. Instead, SBA loans for startups take various forms. So, read on to learn what you need to know about SBA loans for startups and other businesses.
SBA loans for startups have different pros and cons. Now, these are tailored to startup companies but there are also challenges. Let’s take a look at SBA loans for startups and existing businesses:
- Small Business Administration Community Advantage Loan. These loans are available through a number of lenders. Generally, these are competitive, meaning they offer low-interest rates since the government guarantees portions of these loans. Community Advantage loans are more tailored to underserved or new businesses. The downside to SBA CA loans is the longer funding period, which can range from 5 to 10 business days, or longer.
- Bank SBA loan programs. It’s worthwhile to learn a bit about which banks offer small business loans and compared products. You’ll probably find certain banks offer more incentives and better overall debt instruments, including terms, rates, and more.
- Business lines of credit. Another form of business loan is a business line of credit. Instead of one lump sum, business lines of credit works like a credit card. But, a credit card with a larger limit and a few other perks. So, these are revolving credit lines, meaning regular repayments. Also, business lines of credit generally come with a bit higher interest rates.
- 7(a)Loan Program. Here again, the money actually comes from a third-party lender, but the SBA guarantees percentages of these loans. Although, the 7(a) Loan Program is geared more toward businesses with a track record of two to three years.
- SBA Microloans. Typically, these loans are capped at $50,000 but are designed to purchase inventory, buy supplies, and provide working capital. SBA microloans are often found in community development financial institutions or CDFIs.
Finally, business credit cards are yet another way to start up a company. The upside of business credit cards are these generally offer low or 0% introductory financing, along with helpful rewards programs and sign-up bonuses.
Construction to Permanent Loan Process
The construction of the permanent loan process isn’t as scary or complex as people might think. If you’re considering building your dream home rather than trying to hunt down a resale and buy it, you’re certainly not alone. Even if you’re more partial to the building instead of buying a newly constructed home, you’re probably wondering how the financing works. So, let’s take a look at the construction of the permanent loan process.
The construction to permanent loan process isn’t all that difficult to understand. In fact, all fancy lingo aside, it’s quite easy to grasp. For your benefit, here’s a quick look at the construction of the permanent loan process and what to expect.
Construction Loans Explained
Home construction loans are a form of short-term, higher-interest financing used to pay for the building of a residential house. These differ from traditional homes because they are not based on fair market value. Instead, construction loan amounts are based on the value of the house once it’s complete.
Generally speaking, there are three types of construction loans: construction to permanent loans, construction only financing, and renovation loans. Since the latter two are self-explanatory, we’ll continue to focus on construction to permanent loans.
How Construction to Permanent Loans Work
To make it simple, we’ll contrast a construction to permanent loans with a traditional home mortgage. The latter of the two, traditional mortgage loans, cover the purchase price of a resale or even a new build residence. By contrast, construction to permanent loan pays for the building of a residence over the course of its construction in predetermined phases.
These phases are called “draws” and are installment payments that go out when certain benchmarks are met. The lender will inspect the project to ensure it meets requirements every step of the way.
Construction Loan Benefits
There are a few advantages of using a construction loan. One benefit is the borrower only pays interest during construction. (Due to the fact the house isn’t built.)
Another advantage is there are flexible terms. Meaning, you work with the lender to build a loan with terms that work for you and you’re a situation. Unlike traditional loans, which take it or leave it in nature. Yet another big benefit of a construction loan is the extra layer of scrutiny. While you might not initially think this is an advantage, it does work in your favor. This is because the lender will ensure the house stays within budget and on schedule.
Business insurance for small to medium businesses can be like a minefield but you must know you have the right coverage to ensure all areas of the business are protected sufficiently. The insurance of these size businesses is commonly referred to as a Business Owners Policy or BOP.
Business insurance policies are required of all businesses regardless of the industry as the policies differ in line with the industry type. These policies include commercial property policies, liability policies, vehicles or car insurance as well as products, services, and events insurance. Well worth the cost is necessary for complete insurance when a business decides to have it. Alternatively, a company not ensured is much more susceptible to risks and paying the high cost of damages. With any kind of alteration running business finances and services or the dimensions of your house, the audit of your insurance policy must be ensured for full insurance coverage.
Insurance companies too have realized the tremendous potential of this market and they are going all the way to get customers with a variety of attractive business insurance schemes. Waivers of premium, free accidental insurance, group policies for those employees with radically reduced premiums…they pull out every one of the stops when it comes to netting a consumer. The selling is aggressive with the companies jostling for customers along with the competition is fierce. A great deal of energy is expended in wooing potential customers for business insurance and never one particular agent is ready to release any opportunity to log in another business insurance sign-up. It’s furious and because the competition hots within the business insurance seekers is only able to smile…because ultimately they benefit its fast. More attractive offers, more lucrative deals… it’s like a game show, the only real difference being that its actual money exchanging hands.
There are actually generally five types of business insurance. They are grouped in accordance with their very own coverage and features. The first is General Insurance. In this sort of business insurance, business owners are engrossed in the privilege of avoiding legal hassles due to an accident, claims, and injuries of negligence. Additionally, it covers conditions like property damage, medical expenses, and settlement bonds. Adding to that, the company payments can be shielded from issues like slander and libel.
Some of the foremost types of business insurance which can be available cover issues like general liability, property protection, and worker’s compensation. These can help guard up against the typical unforeseen forms of circumstances which could arise anytime and anywhere and might find yourself sticking you with bills you couldn’t reasonably afford.
Insurance agents will even ask you how many years have you currently been in business? Just how much experience have you got? Exactly what are your projected and current gross annual receipts? The amount of full time and part-time employees are you experiencing? If you have mobile service vehicles you will want the complete name, social security number and driver’s license number for all employees who will be driving the vehicles. The greater the number of current files, as well as the more info you bring along when buying quotes the happier the underwriters and agents. Happiness equates into a better deal, and better relationships will each of the parties concerned. Think like this when looking for Business Insurance.
Hard money loans for real estate investors
Hard money loans for real estate investors provide more alternative forms of financing that are very advantageous in more than one way. In fact, hard money loans are a great go-to source for capital investments because these present a convenient acquisition strategy. So, let’s take a look at what hard money loans are and why these are often used by savvy real estate investors.
Hard Money Loans Explained
We’ll begin by explaining what hard money loans are and how they work. Compared to traditional bank financing, these are quite different. These are private debt instruments, funded by a group of investors.
Put another way, a group of diverse investors pool their money together and loan it out. In return, they earn a profit while giving loan recipients some big benefits. Because of the source, this means there’s far less red tape to wade through and that’s a good thing for borrowers.
Hard Money Loans for Real Estate Investors
Hard money loans for real estate investors are a wonderful alternative to traditional financing. Since the big recession, banks have become and remain more risk-averse. Although some lenders have relaxed their stringent requirements, commercial loans remain much more difficult to obtain. Meaning, when real estate investors need funding capital, it’s harder to find a viable source.
Top Hard Money Real Estate Loan Benefits
Now, let’s take a look at the benefits of hard money loans. First, we’ll tick-off a few downsides (which are inevitable with any type of financing). Usually, hard money loans require higher down payments and come with slightly higher interest rates. And, these are short-term loans — but that’s also an advantage in most circumstances. Here are the biggest advantages to hard money loans for real estate investors:
- Fast funding. Unlike traditional lending sources, which often take weeks to months, hard money loans are quickly funded. But, due to the source of hard money loans, who are business-oriented individuals, things move much more quickly.
- Flexible terms. Another component of traditional commercial loans which frustrate borrowers is the terms. Usually, these aren’t very flexible but that’s not the case with hard money loans. Instead, hard money loans often feature flexible terms for borrowers who can customize their debt instruments to better fit their needs.
- Higher rates of approval. Unlike traditional bank loans, hard money loans boast higher approval rates. This is due to the fact there is a motivation to make the loans accessible.
- No or minor prepayment penalties. Generally, hard money loans do not include prepayment penalties, making them all the more attractive and beneficial.
About Rehab Loans for Investors
Rehab loans for commercial property investors are debt instruments that provide the necessary funds for renovations. Rehab loans for commercial property investors are used by both short-term and long-term investors.
For the former, short-term rehab loans are ideal for flipping properties. As for the latter, rehab loans are a nice fit for renovations as a long-term investment strategy.
About Rehab Loans for Investors
There are basically two types of rehab loans for commercial property investors: hard money loans and permanent rehab loans. Hard money loans are for short-term situations for commercial property investors. These debt instruments are likewise used by long-term investors. For short-term situations, hard money loans provide a quick source of funding. Generally, these are from non-bank sources. Hard money loans are generally secured loans, meaning the property itself acts as collateral.
Permanent rehab loans, by contrast, are long-term debt instruments. These are for property renovations by investors who will hold their real property assets for a long period of time.
Rehab Loans Terms and Rates
Generally, rehab loans for commercial properties — because these are non-traditional bank loans — come with higher interest rates. But, the terms are usually much shorter. And, it is also quite common to forego any credit check because the property serves as collateral.
Rehab loan rates will most generally range from about 7.5 percent up to 12 percent. Now, this is a bit higher but it’s due to the fact it pertains to commercial properties and also because these are non-bankable loans. Rehab loan points range from 1 to 10 or 1 to 10 percent of the overall loan amount. While rehab loan terms are usually fairly short, running from just 12 months up to 3 years. The maximum loan amounts can top out at 75 percent ARV or After Repair Value.
Rehab Loan Acquisition Process
So, if rehab loans or hard money loans aren’t supplied by banks, just how do commercial property investors get them? The process is actually straightforward. Commercial property investors usually must first pre-qualify, then receive loan approval. Funding is generally quite fast and then comes the purchase. Then, commercial property investors can renovate their properties and either hold or sell their real property assets.
Hard money loans are not difficult to find. In fact, there are local lenders and national lenders which offer hard money or rehab loans. It’s best to check out several lenders to see what they offer before making a final decision on which to go with.
How to Flip a House for the First Time
We all see it on TV and hear about these amazing success stories. Of course, reality television isn’t at all real (as everyone knows). But, there are indeed successful individuals who make a good living flipping houses. So, just how do they manage to make it work. And, not only get through the process but actually, earn a solid return on their investment. Read on to learn more about how to flip a house for the first time.
How to Flip a House for the First Time
If you’re ready to explore flipping a house for the first time, you’re probably wondering what tips and tricks will pay off the most. The truth of the matter is, planning will do much to put you on the path to making it worthwhile.
The real “trick” isn’t a trick at all. In fact, like any other successful venture, regardless of what it is, the key is more about being realistic and proactive. In other words, those who create and follow an actionable plan and stick to it will fare much better. Here are the top tips for how to flip a house for the first time:
- Understand the money is made at the buy. If you don’t understand what this means, read it again. Make no mistake about it, the money you’ll make (or lose) will happen the very day you purchase it. Put another way, if you buy at the top of your budget, you’ve already undercut your chances of coming out with a real profit.
- Look and wait for a true deal to present itself. Houses are everywhere. There’s a house for sale right around the corner, the next block over, or somewhere nearby. Just because it’s for sale doesn’t make it the right one. Wait for a true deal and then proceed.
- Always follow the golden location, location, location rule. You’ve likely heard the cliche, “real estate is all about three things — location, location, location.” And, it’s truer than you know. Do not buy a good home in a bad location. Do not buy a great house in a mediocre location. Instead, buy the worst home on in the best neighborhood.
- Work strategically and don’t try to do everything yourself. The total DIY approach will do more to sabotage your efforts than make it a success. You are not an expert in everything so don’t act like one. Do this and you’ll cause yourself way too much frustration.
Types of Self-Build Construction Loans
Home construction loans, also known as self-build construction loans, are debt instruments that are used to finance the building of a new house. Now, that sounds all too obvious. But, unpacking the seemly simple and self-explaining term is a bit more difficult. In other words, while someone might well be able to understand what it means, the inner workings are much more complex to explain. So, let’s take a look at self-build construction loans and how these actually work.
Types of Self-Build Construction Loans
Not surprisingly, self-build construction loans or home construction loans are used to fund the building of a new house from the ground up. Also, these serve to fund the complete renovation of a property. The money financed can go to the purchase of land and/or the building of a new house. Or, it might also be used to fund a total refurbishment of a residential property.
Now, onto the biggest difference between a traditional home loan and self-build construction loans — the down payment. Unlike a conventional mortgage, which now requires as little as 3 percent down or an FHA, which requires 3 ½ percent down, self-build construction loans often require 20 to 25 percent. Although, some home construction loans require less, 10 percent.
As you might imagine, this isn’t the only difference. Self-build construction loans or home construction loans, come in five variations:
- Let’s begin with a type of home construction loan that doesn’t involve building a new house from the ground up — a renovation loan. As the same clearly states, this is financing specifically for the total renovation of a property. However, many people go with a home equity line of credit or HELOC.
- Construction only. This is a loan that only covers the cost to build a new home. It’s followed by what’s known as a “take-out loan.” (It’s called a “take-out loan” because it pays off the construction only loan and then works much the same as a traditional mortgage.) So, it’s actually two loans.
- Construction-to-permanent. Instead of taking out two loans and paying closing costs twice, you can opt for a construction-to-permanent which pays for the build and converts to a traditional mortgage.
- Owner-builder construction. This requires the proper licensing but, if you’re qualified to build your own house, this is an option.
Another, called an “end loan,” is when a contractor builds a new home with their own funds. Once the house is finished, you as the buyer take out an end loan to purchase it directly from the builder.
Types of Commercial Loans
There are actually several commercial loan types. Some are immediately recognizable, while others are more niche. When a business needs additional capital, it might seek a debt instrument. Of course, there are a few differences in how these are structured. Terms might well be long or short. While interest rates vary. Collateral may or may not be required. Read on to learn about the most common types of commercial loans.
Types of Commercial Loans
Commercial loans do not substantially differ from consumer or private loans. Sure, there are some departures, but most are similar. Although, the biggest contrasts are usually related to term, collateral, guarantee, and interest.
What’s more, not all banks or credit unions make commercial loans available. However, it’s worthwhile to check with regional operators and smaller, local institutions which might offer better arrangements. Here are the most common commercial loan types found, with variations:
- Lines of credit. This is perhaps the most familiar. It’s a semi-permanent loan that provides capital for different situations. It could fund emergency expenses, bridge the gap when cash flow stalls, or for other reasons. These are fairly low risk, so lenders don’t often charge expensive interest rates.
- Installment loans. As the name states, these are debt instruments that borrowers pay back over a given period of time. (Usually in equal installment payments.) Borrowers receive the funds up front and then amortize the loan on a schedule. Because of the nature of installment loans, interest rates can be higher.
- Balloon loans. Generally, these commercial loans go by other names. (The term “balloon” itself is a bit unnerving.) But, they are structured so the borrower only pays interest during the term and then the principal balance is due at once.
- Interim loans. To the general public, these are similar to construction or take out loans. Meaning, funds are paid out in increments and then another debt instrument is used to pay off the money outlays. (It’s like building a new house. The lender makes payments to the builder. Then, the new homeowner obtains a mortgage to repay those funds.)
- Secured loans. These debt instruments are obtained by promising collateral. While secured loans generally offer a lower interest rate than other commercial loans, the amount borrowed is typically less. In other words, the loan amount is based on a percentage of the value of the collateral. So, collateral worth $20,000 might secure a loan amount of $10K to $15k.
Of course, there are other types of loans. It’s best to compare rates and terms before committing to one.
About SBA Construction Loans
SBA construction loans are a way for small company owners to invest in their enterprises in strategic manners. Everyone knows small business is the primary driver of the U.S. economy, comprising the largest percentage of private employers. To help them grow and benefit their communities, SBA construction loans are often a viable and smart alternative to traditional lending institutions. So, what are SBA construction loans and how do they work?
About SBA Construction Loans
As you probably guess, SBA construction loans are Small Business Administration construction loans (though the SBA itself doesn’t actually loan money. Okay, that’s a bit confusing, but it really isn’t.
Think of it this way, the SBA or Small Business Administration is an entity that helps small companies establish a presence and grow. It does so by providing certain resources. The SBA also establishes certain guidelines for products and services it doesn’t supply directly but through partnerships.
In other words, an SBA construction loan is a type of debt instrument, named after its creator. While its outside lenders which provide the funds, they must abide by certain guidelines and standards. Those guidelines and standards are catered to small businesses to help them succeed.
SBA Construction Loan Advantages
SBA construction loans are offered for a variety of reasons. Most importantly, because they are intended to benefit small businesses who want to own their own real property.
Owning commercial real estate has several big benefits. Of course, the largest is ownership itself and not being dependent on another party. But, there are other reasons SBA construction loans are advantageous:
- Customized for small businesses. SBA construction loans, of course, are tailored to small businesses. These aren’t one size fits all commercial loans. Instead, these are designed with small business dynamics in mind.
- Smaller equity injections. Another benefit of SBA construction loans is smaller sized capital or equity injections. (These are somewhat akin to a downpayment). Since these require less money, they are more affordable, overall.
- Long amortization. SBA construction loans also boost longer rates of amortization. So, it’s possible to obtain a 15-year, 20-year, or even a 25-year loan. This effectively lowers the repayment obligation, helping to free up more cash for other necessary expenses.
- Startup working capital. It’s also possible to obtain working capital through an SBA construction loan. Which injects cash into the business for various expenses.
Overall, SBA construction loans are a smarter way of financing the building of a commercial property, being catered to the needs of small businesses. For help with SBA loans, please contact us. Proactivelendinggroup.com
Choosing a Commercial Lender
Choosing a commercial lender can easily be a complex and daunting task. It really doesn’t have to actually be that way, though. When you’re ready to select a commercial lender, like proactivelendinggroup.com, it’s important to know your options. While many institutions will work hard to solicit your small business’ business, few are actually up to deliver when it comes time.
What is a Commercial Lender?
A commercial lender is an organization that provides different forms of financing and payment processing for businesses. These usually include programs like hard money loans, soft money loans, payment processing, and more.
A commercial lender provides financing for equipment purchases, inventory, and real estate. So, if you want to buy a commercial site, you’ll seek a mortgage through a commercial lender. Commercial lenders can come in the form of a bank, an independent group, or other entity.
Choosing a Commercial Lender
If you are in the position of needing to find a commercial lender, you’ll obviously want to make the right decision. Big banks are often the first place business owners think about but these are generally bad matches. They are so large, there is no real personalized experience. Here are some helpful suggestions about how to choose the right commercial lender:
- Seek out an organization that can meet your needs. This is probably the most obvious, but it makes the list simply because it’s so important. In short, you must choose a commercial lender who can actually meet your needs. If a particular lender can’t deliver, there’s no sense in wasting time.
- Consider the face-to-face relationship factor heavily. As mentioned above, the big banks are largely corporate. Now, there’s nothing wrong with corporations but how they operate is vital Large banks experience a lot of personnel turnover. And, they often require borrowers to wade through a lot of red tapes.
- Think about their level of earned trust and reliability. Reputation is very important because others’ experiences will certainly tell you a whole lot. Look into customer reviews and see how they interact on social media. Check their BBB rating and other reviews to gauge how they do business.
- Don’t forget to factor in response time and communication. Here’s something that’s huge. A good commercial lender has a reputation for quick or timely responses and for open communication.
Lastly, don’t forget about terms and rates. While these will certainly be an initial factor, the lowest rate with the best term might seem like a good fit. But, it’s all about the total package.
How to Appeal a Property Tax Assessment
If you want to know how to appeal a property tax assessment, you’ve likely just received a letter. Or, you’re reviewing your property taxes online. It comes straight from the official source. So, there’s no doubting (or believing) it’s true. Just how did the assessor come up with this figure and what can you do to dispute it?
Generally, property taxes are calculated by multiplying the home’s assessed value by the local property tax rate. Now, that sounds both obvious and confusing, but if you work the numbers, you’ll begin to uncover the formula.
How to Appeal a Property Tax Assessment
If you’ve just received a letter from the local property appraiser or tax collector and believe that it’s incorrect, re-read the entire document carefully. Don’t scan it — peruse it and be sure to check the back. More than likely, you have 30 days to challenge the assessment and the steps for doing so are probably included. However, if the procedure isn’t spelled out or it’s not clear, here’s how to appeal a property tax assessment:
- Consider the “hassle factor” first. Before you invest real time and effort with the process be sure that’s it’s actually worth pursuing. Run the numbers and look carefully at the results. If you save a good portion, then proceed. But, if it’s negligible, then it’s probably not worth the time and effort.
- Check the data. Next, go over the information provided. Is it accurate? Look for the number of bedrooms and bathrooms, living square footage, the lot size, et cetera. If something is off, this might be the culprit.
- Get information on comparable properties. If the information is accurate, you need to know about nearby comparable properties. You can find comps through a CMA provided by a local real estate professional. Or, pay for a formal assessment.
- Present your case. Once you have the information, you can then ask for a review and present your case. Provide the evidence to the tax collector or property appraiser.
- File an appeal. If you aren’t successful, you can file an appeal, usually for a small fee.
It’s important to note, this process isn’t without risks. It is possible bringing the data under more scrutiny might have a negative consequence in a reverse effect. It could cause more of a tax increase due to the examination. Also, if you are successful, remember you are essentially devaluing your home. (That’s particularly bad if you’re about to list it for sale.) For Commercial Loan help, please contact us.
What You Need to Know About SBA Loans
There are some things you should really know about SBA loans. If you’re about to go into business for yourself or are looking to expand, you[‘ve probably heard about the Small Business Administration.
It’s an institution that exists to help small companies establish a presence, grow, and thrive. But, it’s not actually what most people believe it is (though these facts should be well-known). Yes, the Small Business Administration does assist companies in many industries with different needs, but it does so in a way that’s not like most people realize. With this in mind, let’s take a look at what you need to know about SBA loans.
What You Need to Know About SBA Loans
Okay, we’ll begin with the first thing you ought to know about the SBA — did do NOT loan money. That’s right, although you might hear about SBA loans, the governmental entity itself just doesn’t loan money. Instead, it helps connects businesses to lenders who generally offer one of three types of business loans: 7(a), CDC/504, and microloans. Each of these is different and suit various needs.
For instance, 7(a) loans are for purchasing just about anything. While the CDC/504 is intended for large assets, like equipment or even for commercial real estate. Microloans are also for purchasing anything but are the smallest, averaging just $13,000.
But, these aren’t the only thing you need to know about SBA loans. Here’s a little more you should know about SBA loans:
- The SBA is a guarantor. Instead of loaning money, the SBA guarantees loans (generally ranging from 75 percent to 85 percent). This means two things: you’re not personally liable for the whole amount but you are personally liable for the remainder outside the guarantee.
- Collateral is generally needed. The old adage “there’s no such thing as a free lunch” certainly rings true here. In most instances, the borrower must pledge collateral in order to obtain financing.
- Interest rates might be higher. Just because the SBA helps small businesses doesn’t mean they set the terms of loans. That’s still up to the actual lenders. As a result, interest rates can be competitive or higher than if you go directly through a lender.
- Not all SBA loans perform the same. As stated above, the three SBA loan types function differently. But it’s also important to note that there are other choices. For instance, dealing directly with a small or regional bank might yield better terms.
1031 Exchange Loan Rules added 3-2-2018
1031 Exchange loan rules unnecessary cause a lot of confusion. People who are unfamiliar with the process usually have misconceptions about what it is and what it isn’t. That’s a real shame because this simple tax law is great for real estate property investors. If you’ve not heard of a 1031 exchange or have encountered the term, you probably have a few questions. So, let’s look at the basics of 1031 exchange rules
1031 Exchange Loan Rules
Okay, so a 1031 exchange gets its name from the United States tax code. Most of us are familiar with other provisions, like the 401(k) or 403(b) — both of which relate to retirement investing. But, a 1031 exchange is all about real estate. And, it provides some great benefits to property owners.
Also called a like-kind exchange, this procedure is used for its big-time tax advantage and other benefits. However, there is often confusion about how it actually works.
The purpose of a 1031 exchange is to “swap” one property for another without triggering a tax bill. But, to avoid paying taxes prematurely, property owners can use a 1031 exchange. So, here are the fundamentals of the 1031 exchange rules:
- The existing property must meet qualification standards. The property you now own must meet certain criteria. But, don’t worry, most investment properties qualify. While you can’t use a 1031 exchange for your own personal residence, land under development, or fixer-uppers, most other properties meet the standards.
- The replacement property must be titled in the same way. Another 1031 exchange rule is that the replacement property must be titled in the same way the existing property is titled. The titling must match to make it eligible.
- The replacement property must also be like the current one. Here’s where most of the confusion comes into play. The replacement property must be “like-kind.” Now, that doesn’t mean it has to be the same. Because you’re simply trading one investment for another. Put a different way, you can swap out a rental house or apartment building for a strip mall.
As you can see, the 1031 exchange rules are fairly straightforward. But, the language the IRS uses causes a lot of undue confusion. When done correctly, you simply change out one type of property for another and escape paying taxes on that particular transaction. It just allows your investment to grow in a tax-deferred status for the time being and until you actually sell it off. For help getting a 1031 Exchange Loan In San Antonio please contact us.
Benefits of a Fix and Flip Loan for Customers added 2-1-2018
The benefits of fix and flip loans are substantial. Sure, you can try a traditional lender, but you’ll find them a lot less receptive. And, even if you do start the process, you’ll definitely learn why so many investors prefer to fix and flip loans, instead. Property investors need special debt instruments simply because of the way the whole fix and flip process works. So, let’s take a look at some key advantages of fix and flip loans.
Benefits of a Fix and Flip Loan for Customers
Okay, so if you’re new to property investing, particularly any kind of residential or commercial real estate, you have a lot to learn. As you go through your first acquisition, you’ll experience a few new things. For instance, fix and flip loans. What exactly are fix and flip loans? Well, they work just how it sounds. You get financing to purchase and rehabilitate a house or multifamily property and then sell it for a profit.
Now, you might wonder why not get a loan from a bank? Put simply, you’ll likely find more rejection than welcome. It’s just the way that particular industry works. Lessons learned from the big housing bust back in 2008 and 2009 carry forward today.
So, if there are advantages to fix and flip loans, then there’s probably a downside, right? That’s correct, but the cons are really small. For instance, the rate will likely be a tad higher, plus maybe a bit larger down payment. However, there is far better. Here are the biggest benefits of fix and flip loans property investors should know about:
- Superfast funding. Unlike traditional banks, fix and flip loans come mostly from private investor groups and/or companies. Their mission is to use the money to make more money and do so in a timely manner. Big bank financing takes several weeks or months, all while complicating the process with red tape. But, fix and flip loans are funded quickly.
- Generally no early payoff penalties. If you obtain a regular loan from a traditional bank, you can fully expect there will be a catch — early payoff penalties. But, that’s usually not the case with fix and flip loans.
- Higher approval rates. Another big advantage of fix and flip loans is that they boast a higher approval rate. After all, the whole point is to lend money to make money.
- Flexible terms. Generally, you’ll find fix and flip loans are short-term and therefore, often have some flexibilities which favor property investors
The benefits of fix and flip loans are substantial. Sure, you can try a traditional lender, but you’ll find them a lot less receptive. And, even if you do start the process, you’ll definitely learn why so many investors prefer to fix and flip loans, instead. Property investors need special debt instruments simply because of the way the whole fix and flip process works. So, let’s take a look at some key advantages of fix and flip loans. If you are in need of a Fix and Flip Loan in the San Antonio area please contact us
Safety Checklist for Construction Sites added 1-6-2018
It’s always necessary to have a safety checklist of construction sites. Regardless of the size of the job. No matter how much time it will take from start to completion, workplace safety is paramount. You must be proactive and ready at all times because you never know when an accident will happen. Whether you’re a general contractor, a plumber, electrician, brickwork, carpenter, or foreman, you must have a safety checklist to ensure everyone is on the same page.
Safety Checklist for Construction Sites
A safety checklist for construction sites is not just a document. It’s far more than just a list of do’s and don’ts. It’s an effective way of keeping everyone on the job site aware. It’s a sad fact, too many individuals are needlessly hurt on the job when doing construction work. They suffer all sorts of injuries, ranging from mild to moderate to severe. Make no mistake about it, a construction site is a dangerous site. It’s simply fraught with hazards everywhere you look. Even seemingly harmless things can pose a danger.
Construction Site Safety Checklist
Remember, safety is all about good practices. It’s about having situational awareness and taking necessary precautions.
- Keep debris in a dedicated place. Always remove debris from the worksite and move it to a safe container so the work site stays orderly.
- Keep the work area and tools and equipment tidy and free of debris. Place waste materials in designated containers.
- Keep all pathways clear at all times. This includes walkways, stairs, scaffolds, ladders, gangways, and more.
- Keep all materials away from edges, be it near elevated surfaces or roof edges.
- Keep all cords and tools away from walkways and other traveled areas on the job site.
- Keep all structural openings clearly marked and covered as often as possible. These include shafts, floor openings, sumps, and more.
- Keep all working areas properly ventilated.
- Do not throw debris or garbage from any level of the site.
- Do not throw equipment, tools, or debris from any higher level to any lower level.
- Do not raise or lower tools by their power cords.
- Do not raise or lower any tool or equipment by its supply hose.
It’s also important to treat all hazardous materials properly. Never move or disturb hazardous materials without wearing proper personal protection.
Keep flammable materials stored away from all other types of construction materials.
Clearly and conspicuously post No Smoking signs near flammables and/or explosive materials.
Have fire extinguishers charged and ready to go.
What is a Hard Money Loan for Real Estate? added 12-5-2017
There are many types of financing options available for residential real estate transactions. But, the choices narrow considerably when it comes to multifamily and commercial properties. That’s simply because these parcels and improvements cost a lot more. And, the more money loaned, the bigger the risk. So, there are fewer financing options available to investors and business owners. However, there is one alternative which offers some key benefits — they’re known as hard money loans.
What is a Hard Money Loan for Real Estate?
If you’re new to hard money loans or haven’t heard the term before, you might wonder exactly what these are and how they work. Well, put in a straightforward way, hard money loans provide financing from a group of individual investors or an enterprise entity. In other words, people put their cash in a fund to loan out. This gives investment property buyers and business owners access to funding without having to go through a traditional commercial lender. Of course, this means these work quite differently from traditional debt instruments.
Hard Money Loan Advantages
The great thing about hard money loans is they usually don’t require a credit check. But there are more benefits. Before we delve into the pros, let’s take a quite look at hard money loan downsides.
Hard money loans are not as abundant as traditional commercial loans. They also come with a slightly higher interest rate. And, most require some form of collateral. But, these considerations are greatly outweighed by the benefits of hard money loans:
- Rapid funding. Because of the source, there’s no need to wait for weeks or months to receive financing. It’s generally available in a very short amount of time and that allows property investors to act fast to secure a property purchase.
- Flexible payment options. Unlike traditional financing, you’ll find quite a bit of flexibility. It’s common for borrowers to customize their repayment plans when getting a hard money loan.
- Fewer approval requirements. Usually, you’ll need just a few things to qualify. As mentioned, you’ll need collateral, which can be in different forms. Additionally, borrowers must have an exit strategy in most instances. But, there are also fewer or no credit requirements for hard money loan approval.
- Great for short-term propositions. Hard money loans are not for long-term financing. But, that makes it great for commercial and multifamily because it’s typically the case borrowers only need short-term options.
Another advantage of hard money loans is these are an ideal funding source for deals deemed too risky by legacy banks and lenders. For more information about Hard Money Loans in Texas, please contact us, http://www.proactivelendinggroup.com
Benefits of Getting Multi-Family Hard Money Loans, Explained added 11-2-2017
Hard money loans are a great resource to finance a multifamily purchase. But, since commercial real estate investing isn’t as prevalently covered and explained by news media, they are not widely understood. Hard money loans remain somewhat a mystery to many people. And, even those who have experience in the traditional, residential real estate market, might not know much about hard money loans
Benefits of Getting Multi-Family Hard Money Loans, Explained
So, exactly what are hard money loans? And what advantages do hard money loans provide those seeking to finance for a multi-family property? Well, hard money loans differ from traditional mortgage debt instruments in various ways.
You’re probably familiar with how traditional, conforming, fixed-rate mortgages work. You apply, get a pre-qualification, a cursory look at your finances. Then you receive a pre-approval, a more in-depth look, to provide you with a loan amount. Finally, you buy a home and close on the transaction. All of this can take 45 days to 60 days to 90 days to complete.
Hard money loans are very different. You don’t apply to a bank as just a number on a file. Plus, your credit score isn’t typically a factor. And, you must wait weeks for final approval. Even then, you’re not guaranteed to fund.
By contrast, hard money loans provide fast funding, require no credit inquiry, have a flexible term structure, and do not include many of the well-known fees and penalties.
Here are some of the biggest benefits of getting a multi-family hard money loan:
- Quick funding. Unlike getting a traditional commercial mortgage for a multi-family property, which takes weeks upon weeks and even months to secure funds, hard money loans offer rapid funding. Because hard money loans come from private investors, funding is quick, with fast turnaround time.
- No credit check. You also won’t have to undergo the credit scrutiny that’s associated with a traditional commercial mortgage. Instead, you’ll most likely pledge some collateral to secure funding for your multi-family home purchase. This is a huge benefit because of the size of the loan amount.
- Flexible term structure. Banks are not known for their flexibility. And, this is more painful for those who try to go the traditional commercial mortgage route. By contrast, hard money loans do offer a lot of flexibility. Terms and rates are flexible, which is a huge benefit.
- No prepayment penalties. Another advantage of hard money loans is there are no prepayment penalties. That’s an enormous plus and for good reason.
What’s Involved in Getting a Hard Money Loan added 10-4-2017
Hard money loans are a way to finance a real estate deal. Trouble is, too many people don’t know what this financing is or what’s involved. It’s a strange-sounding term but its effectiveness is something that makes it a great resource. Like all things in life, there are pros and cons to hard money loans. But, these can serve as a valuable tool, particularly when understood.
What’s Involved in Getting a Hard Money Loan
You already know what a mortgage is and probably know there’s also a commercial counterpart for buying different kinds of real estate. But, commercial real estate loans or even loans to purchase multi-family housing are difficult to obtain.
The reason for this is because the property in the transaction isn’t a primary residence. And, it’s also occupied by renters or lessees. So, there is a lot more risk to lenders. Moreover, these properties are a lot more expensive and that also adds greatly to lenders’ exposure.
An alternative to a regular commercial or multi-family mortgage is a hard money loan. But, just what is a hard money loan? A hard money loan is financing provided by a group of private individuals instead of a bank or credit union.
It’s important to understand a key difference in hard money loans over regular housing or commercial building loans. First of all, hard money loans are not based on the buyer’s credit score. Instead, hard money loans are based on the value of the property itself.
And, since hard money loans are not granted by banks, they don’t carry all the familiar red tape. Plus, most hard money loans can fund up to 100 percent of the purchase price. That’s something that’s simply often not an option for traditional lenders.
What’s more, there are usually local hard money lenders. This is great because the borrower can form a professional and personal relationship with the lender. Even better, some hard money loans do include typical costs usually associated with traditional loans.
Another important point is hard money loans are not long-term loans. Instead, these are short-term financing options, ranging from just a few months to a year or more. And, funding is super quick, taking just 7 to 14 days rather than 30 days or more. (This is why hard money loans are used for commercial and residential flips.)
Of course, there are other components of hard money loans. One being, they typically come with a higher interest rate. And, usually, require collateral. But, hard money loans have so many benefits. If you are interested in a Hard Money Loan in Texas, please contact us.
Commercial Real Estate Closing Tips added 9-3-2017
Commercial real estate greatly differs from residential. First of all, it’s not just a transaction between a single buyer and seller, rather, between several parties. And, it also involves several parties, some of which don’t have any real legal interest in the deal. It’s best to be in the know to buy or sell commercial property and to be prepared for the closing.
Commercial Real Estate Closing Tips
When you are involved in a commercial real estate transaction, you won’t be the only party. Not only will there be a seller, but other people (for instance, tenants). Not to mention attorneys, a title company, and more actors. All of these and more parties will play a role in a commercial sale.
Therefore, you should have an actionable plan or it can quickly become a chaotic situation. Knowing zoning requirements, utility availabilities, structural integrity, and more are also part of the transaction. It’s time to look into these things when you first begin the purchase process. Otherwise, these and other considerations can create nightmarish scenarios.
Here are some more commercial real estate closing tips to help you enjoy a less stressful transaction:
- ● Know the lender requirements. Every lender has its own requirements and even if you’ve purchased a commercial property before, it might well be different this time. For example, one lender might stipulate all requirements are met before the date of closing while others have different rules.
- ● Have subordination agreements ready. Commercial properties with multiple tenants typically require subordination agreements. These include an SNDA or subordination, non-disturbance, attorney agreement. The SNDA documents are a critical part of the commercial closing, so having these in-order is very important.
- ● Be prepared for third-party delays. Sometimes, parties that do not have a direct role in the transaction might become involved. For instance, a local government might bring in certain obstacles and that can mean long delays.
- ● Get the right person to sign documents. The governance documents need a certain individual’s signature. But, it’s not always easy to get authorized persons to be on-site during the closing. Be sure to have a plan going forward so there isn’t a last-minute delay.
- ● Take care of lien waivers. It isn’t unusual for commercial buildings to have liens and these can stop the closing from concluding. So, be sure to address lien waivers proactively.
Lastly, you should be proactive about potential delays. Speak with all parties to learn if there are any looming or possible obstacles. This way, you can address them ahead of time so the closing stays on schedule.
How do Construction Loans Work? added 8-2-2017
If you’re interested in building your own property, be it residential or commercial, you’ll no doubt wonder how to obtain financing for this real estate endeavor. The fact of the matter is, when you build, it means having to work with a variety of people to get from concept to completion. Even when financing a traditional single-family home, that’s also the case, it just isn’t as complex as commercial construction loans. Either way, there’s often a lot of confusion surrounding both residential and commercial construction loans. So, let’s look into what’s actually involved.
How do Construction Loans Work?
Many people wonder how construction loans work. This is because the vast majority of those entering the market do so as buyers — not developers. But, there is a niche in new construction as it provides many solutions resales cannot.
For instance, a resale might need significant repairs and improvements to be suitable for their future purposes. This means older homes and commercial buildings need an extensive inspection to assess what’s needed. And, that can often be cost-prohibitive, given the age of the property. So, construction is a more realistic alternative.
But, most people just don’t have the cash to build, whether it is for a residential home or a commercial building. Here’s an overview of how construction loans work:
- ● Choose a lender. Of course, construction typically requires financing and therefore a lender is necessary. But, which entities actually provide commercial construction loans? Well, in the past, commercial construction loans were only provided by regional and local lenders. The reason for this was prohibited regulations and because those regional and local banks knew the local market. But now, there are far more choices. However, regional and local banks still make up most of the construction loan industry.
- ● Apply for the right financing. Financing construction is different than a resale because there isn’t any property history. Short-term financing is typically the starting point, which then transitions to long-term financing or a take-out loan. The former provides funding for the initial construction until the building units start leasing to tenants. Then, long-term or permanent financing comes into play. Thereafter, the two loans are combined into “mini-perm” financing. A mini-perm loan generally carries a shorter term than traditional long-term financing but, it amortizes the short-term financing. This gives the property time to establish a property history — something that did not exist previously.
As you can see, construction loans are somewhat complex but are often necessary to supply funding for building new properties.
Advantages of Hard Money Loans 7-3-2017
The advantages of hard money loans can’t be understated. But, it’s very important to understand these products to get the best results. Hard money loans (also called private loans and bridge loans) are quite different from traditional financing. And, this is precisely what makes them so attractive, particularly to real estate investors. So, let’s take a look at the advantages of hard money loans.
Advantages of Hard Money Loans
Now, if there are benefits to hard money loans, you’re right to guess there are downsides. However, these aren’t a big deal. One small disadvantage is these involve typically higher interest rates but are short-term, anyway. That means another tiny disadvantage is private loans aren’t long-term debt instruments. Additionally, this type of financing usually requires a big down payment, ranging from 25 to 35 percent. But, the advantages of hard money loans can easily outweigh any downsides for the following reasons:
- ● Super rapid funding. If you’ve obtained a traditional mortgage before, you know full well that gut wrenching feeling and all the hand wringing that comes with it. There’s seemingly no end to the paperwork, red tape, and other requests and requirements. But with hard money loans, lenders act much, much faster. The reason is simple: there’s no bureaucracy and lenders instead just concentrate on the liquidation value of the property. In other words, if the property claims a solid value, private lenders act quickly to provide financing.
- ● Flexible terms. Another big obstacle to getting a traditional loan from a main street bank is there’s always a catch. Whether it’s the interest rate, points, larger down payment, longer employment history, or other factors, eventually, there’s a catch. But with hard money loans, private lenders have the freedom to structure debt instruments which are more mutually beneficial to both parties. That’s a huge benefit, particularly to borrowers who enjoy more flexibility.
- ● No prepayment penalties. One very unattractive and expensive feature of traditional loans are prepayment penalties. So, things go really well and you want to amortize it at a faster pace or all at once. But, when you inquire about doing so, you learn you’ll pay hefty prepayment penalties. However, with hard money loans, there are no prepayment penalties holding you back when you’re ready to pay it off and move on to the next thing.
- ● Approval when traditional lenders decline. Traditional lenders don’t cozy up to the risk that comes with a property flip. But, private lenders see opportunity and make loans available for these types of situations. For help getting a Texas Hard Money Loan, please contact us at http://proactivelendinggroup.com
It’s Essential To Only Choose The Best Possible Cement Available For Construction added 6-2-2017
Cement is often the most critical individual element of a construction project, given that it’s essential to firmly holding together any structure. That’s the big reason why it’s critical that you only choose high-caliber cement which is going to guarantee the longevity and structural integrity of your construction project.
The true quality of any cement is going to be very dependent upon its strength, given that concrete is often the base of a construction project. High-caliber concrete is able to resist environmental degradation efficiently so that it reliably protects a building from severe weather and insects. So, what should a builder look for in concrete prior to starting a construction project?
Is The Supplier A Reliable One?
Any builder you use has to go over the precise requirements of your project and then plan it out meticulously. Only then can the builder focus on finding a great building material supplier who provides high-caliber cement for the construction needs. Any supplier that is truly dedicated to providing excellent quality cement, as well as great service, is going to be one who can stand behind his claims. Testimonials from previous clients are useful in demonstrating whether or not a supplier backs up what he says. Checking the feedback, reviews, and ratings of previous clients of a supplier is a great way to know if their marketing and branding hold up as true regarding the caliber of their service and the quality of their products.
Most building material suppliers that are renowned have earned their reputation by consistently providing the proper materials builders needed. Many ordinary suppliers have a practice of mixing their cement supply with external elements. That mixing dilutes the cement quality, making it a risky proposition for construction use. That’s another reason why you always need to be on the hunt for a reputable and reliable supplier before you invest in your supplies so that you only get the highest-quality cement for your own construction project or needs.
It’s highly recommended that any builder put in more than the token effort in their research into reliable suppliers that guarantee their services and products. Meticulous inspection of any supplier’s work is a part of that proper research, making sure that you don’t get mesmerized by flashy branding
Learn 5 Cement Types
Other than ordinary Portland cement, there are five main varieties:
1) White: This kind of cement is formed when it gets freed of any coloring oxides, like iron, chromium, or manganese. It’s manufactured from oil rather than coal as its fuel. It’s used primarily for plastering, finishing, and decorating things like marbles or glazed tiles.
2) Rapid Hardening: This gets manufactured through high-temperature burning with additional lime content. That seems to enhance its strength, but also speeds up the construction activity.
3) Colored: Typical cement is enhanced with color by mixing pigments into it intimately. You can make green cement with chloride oxide for instance. Cobalt would be used for blue, and iron oxide in varying proportions gives you yellow, red, or brown. These uses are good for coloring window sills, floors, and walls.
4) Quick Setting: This kind of cement is formed when a little aluminum sulfate is added after the amount of its gypsum is reduced. It undergoes further fine grinding to upgrade its ability to set quickly. It lives up to its name, as it often starts setting in less than 5 minutes after you physically add the water to it. It can be rather hard within a half hour. It’s used to block hold water that’s either slowly running or static.
5) Low Heat: This kind of cement is manufactured specifically for huge concrete projects. When something like a dam is constructed, for instance, hydrating the cement creates heat, which can hurt the construction. Low-heat cement is able to keep a construction intact, thanks to only 5 percent of tricalcium aluminate and 46 percent of dicalcium silicate.
You should always do a fast field test on any cement you have by checking the following before you use it:
-Check the freshness by looking at the date printed on any cement bag
-See whether if floats in any water for a while before it sinks
-See if there are any lumps because of moisture
-Verify the uniformity or consistency of its color
-Check its smoothness when you rub it between your fingers
-Verify its strength by taking a cake of the cement and submerging it in water; after 24 hours, its shape should be the same
Ensuring that only the best possible cement is being used in construction is not a prerogative of the builder, it’s his responsibility. He or she is obliged, legally and morally, to only use high-caliber supplies, especially for cement, given that it determines the potential safety of anyone working or living in a building. For any help with getting a Construction Loan in Texas please contact us
Reasons to Consider Hiring a Construction Cleanup Company added 5-2-2017
There’s a lot to the world of construction. Things move at a fast pace but when it comes to site cleanup, that’s certainly an exception. After all, it takes a lot of time and effort to do a construction site cleanup and it’s manpower and energy that can be better used elsewhere. But, it doesn’t have to be such a burden, particularly when you take a look at the reasons to consider hiring a construction cleanup company.
Reasons to Consider Hiring a Construction Cleanup Company
Let’s face it, construction sites are unorganized and downright dangerous. Some of the many risks are the scattered debris, which can be found all over the site. It’s not only a tripping hazard, but it also presents other risks. For instance, it’s a fire hazard and can likewise be full of potential cuts, scrapes, and much more. So, it’s very important to keep construction debris to a minimum. Here are some good reasons to consider hiring a construction cleanup company:
● Keep your crew on-pace. When construction debris begins to accumulate and pile up, it’s got to be cleaned up sooner or later. But, it doesn’t matter when because always takes the focus off getting the project done. Keep your crew in the game and working toward completion by hiring a construction cleanup company.
● Maintain a safe work area. As mentioned above, there’s a lot of different hazards construction debris presents. Every moment it’s left on-site, is another potential accident. And, accidents are not only disheartening but also, can be quite costly. Even worse, there are insurance and legal concerns that might arise.
● Be known as thoughtful. When you keep the site clean and organized, you’ll be thought of as responsible. As a result, you’ll rightly earn a good reputation for keeping on top of things.
● Help keep the surrounding area clean. It’s not only responsible to keep the site itself clean, but also, the surrounding area. When you hire a construction cleanup company, they’ll keep the area around the site in good condition which is another responsible measure and shows you’re environmentally friendly.
● Get right to the next job. If you take on the task of a construction site cleanup, you’re only delaying the time you’ll get to the next job. And, it’s well known that time is money and this is no way to spend your crew’s valuable time.
When you hire a construction cleanup company, you’re actually making a time-saving investment that pays off in more ways
The 5 Crucial Parts of the Application Process when Renting an Apartment or Home ADDED 4-3-2017
When you’re ready to rent an apartment or a home, you’ll likely have the applicant go through an approval process. This can present a challenge for some would-be renters but it doesn’t have to be a burden. You need to understand what’s considered so you make the right decision and rent to a responsible person. That’s why it’s good to know the five crucial parts of the application process when renting an apartment or home.
The 5 Crucial Parts of the Application Process when Renting an Apartment or Home
Renting comes with a lot of responsibility, particularly because it is you who owns the property. Therefore, you need to carefully screen applicants to lower your risk. Because of this, you’ll have to define a solid vetting process. But not all are the same. Some are more stringent than others, depending on the situation. In general, though, these are much the same, with little differences. Here are the five crucial parts of the application process when renting an apartment or home:
1.The applicant’s income. Okay, but this one in the “obvious” column. But, it’s worth mentioning because this will constitute a huge portion of the approval or denial. Generally, applicants need to earn 3 to 4 times of the rent amount in their gross monthly income. So, if the rent is $1,200, they will need to earn between $3,600 and $4,800 per month.
2.Their rental history. If they haven’t rented before, it’s good to require a larger security deposit than others with a demonstrable rental history. Of course, if they have a good rental history, this won’t be an issue but rather, a plus. But, if they do have a spotty rental history, you’ll have to decline and move on and accept other rental applications.
3.Their credit file. Yes, it is very important to run a credit check through all three reporting bureaus. But, it’s important to note that medical debt and student loans aren’t counted the same way. So, applicants with a decent to fair credit score should be able to qualify.
4.Their background. Along the same lines is the applicant’s personal background. If they have a criminal record or even have been involved in lawsuits and/or bankruptcy, these can constitute significant obstacles. Be sure to run a thorough criminal and civil background history so you aren’t unpleasantly surprised later on.
5. Their employment history. In addition to the above, their employment history should also be examined. Renters with a good employment history are preferred to those with a spotty work record.
What You Need to Know about Structured Settlements added 3-2-2017
If you’re involved in a lawsuit as a plaintiff, you’ll have a lot to consider. It’s an emotional and difficult affair. You’ll be presented with many choices along the way and encounter a few surprises. One such choice as the prevailing party in a civil action is in regard to your payment options. When you win a court case, you’ll generally have to choose between a lump sum payout or a structured settlement. Both have advantages and disadvantages but you need to know about structured settlements to make a more informed decision.
What You Need to Know about Structured Settlements
Many personal injury cases result in the plaintiff receiving compensation. While the amounts vary, usually there is an option to take a lump sum or to enter into a structured settlement.
Plaintiffs might receive compensatory and/or punitive damage rewards from a court of law. When this happens, the defendant is under court order to pay the plaintiff. So, you can opt to receive a lump sum or go with a structured settlement. But you should know what the latter means.
Here’s what you need to know about structured settlements:
- A structured settlement provides a steady income stream. The most attractive aspect of choosing a structured settlement is that you receive, regular payments. That provides peace of mind for most people. But, there are instances when it’s not as advantageous.
- The payments from a structured settlement are mostly tax-free. Another benefit to receiving a structured settlement is the payments are mostly tax-free. A lump sum payment is considered income by the IRS and is therefore taxed. However, structured settlements come through a third-party entity and investment, which usually means no taxes.
- Structured settlement contracts provide flexibility before finalized. A particularly attractive benefit to receiving a structured settlement is the ability to get regular payments of equal amounts. Or, choose to receive periodic lump sum payments over a given schedule.
- Payments from structured settlements are fixed, not adjusting for inflation. Regardless of what you choose, the cost of living, known as inflation, increases yearly. Structured settlements do not adjust for inflation. In other words, you won’t receive a COLA (Cost of Living Adjustment).
- The plaintiff receiving a structured settlement is allowed to sell it for a lump sum. If a structured settlement becomes too difficult to deal with, you can always sell it off for a lump sum.
As you can see, there’s a lot to consider about receiving a structured settlement. So, it’s best to get helpful advice to make the right decision.For help with structured settlements or any type of Commercial Loan in Texas please see http://proactivelendinggroup.com
What to Know about Trust Deeds added 2-2-2017
Deeds of trust, also commonly referred to as trust deeds, are a security instrument used by borrowers and lenders. Much like a mortgage or traditional home loan, a trust deed is a form of collateral agreement to pay a debt. In general, deeds of trust are used to pledge real estate as means of obtaining a loan. Unlike mortgages, however, the take-back or foreclosure process differs. In some instances, trusts deeds are mandatory for obtaining financing.
What to Know about Trust Deeds
Most people are familiar with how traditional mortgages work. A borrower applies for a loan and in exchange for a promise to repay, along with interest paid, the lender provides financing. The real property purchased by the borrower is then collateral against the loan amount. If the borrower falls into arrears or cannot repay the loan, the lender begins the foreclosure process.
There are two types of foreclosures: judicial and nonjudicial. Depending on the jurisdiction, one or both are available to lenders.
A judicial foreclosure involves the civil court system. The lender must sue the borrower for the collateral (the real property) to repay part or all of the loan. If there is a deficiency, the lender might be able to sue the borrower for the difference to make up for the loss.
Nonjudicial foreclosure exercises one or more clauses of the debt instrument, allowing the lender to foreclose without going through the civil court system.
Deeds of trust work a bit differently. Instead of the real property being titled to the borrower, the collateral is assigned to a trustee. Said trustee keeps possession of the real estate collateral until the loan is completely repaid by the borrower. After the loan is fully amortized, the trustee relinquishes the title and the real property is titled to the borrower, who is now the unencumbered owner.
Much like a traditional loan, if the borrower goes into arrears and/or is unable to repay the loan, the lender is able to start the foreclosure process. Once the foreclosure process is completed, the lender takes the title of the collateral property from the trustee.
Although there are differences between deeds of trust and traditional mortgages, there are more similarities. But, it is typically advisable to consult an attorney before entering into a trust deed.
In any instance, deeds of trust are a bit more complex and do involve different legal issues. Deeds of trust serve as a solution in certain circumstances. Depending on the situation, a trust deed might be used in conjunction with a mortgage or a standalone security arrangement.
Should Long-Term Real Estate Investors Focus On Cash Flow or Growth?
This is a long-running debate and both sides have legitimate points. The fact of the matter is, long-term real estate investors are long-term thinkers and planners. They look into the future but always factor in the present and short-term. Still, the question remains, should long-term real estate investors focus on cash flow or growth?
Should Long-Term Real Estate Investors Focus On Cash Flow or Growth? added 1-6-2017
To answer this question, it’s best to first define what the two terms mean. Cash flow, of course, is the net money gained or lost on a monthly basis. One mistake many rental property owners make all too often is believing just because the rental charge covers the mortgage expense, they are “making money.” However, that’s simply not the case. The rental income must not only cover the home loan payment, but also, the property taxes, insurance, and other carrying costs.
As for investors who buy real estate to rehab and flip, underestimating the costs of renovation causes undue financial strain. It not only causes many to hold longer than they first intended, it also puts them in an anxious position.
Growth is the number of properties owned, free and clear of mortgages. In order to obtain this goal, some real estate investors will leverage one or more properties in order to purchase another. While this is possible, it is a precarious method for growing a real estate portfolio. This is because with every new property, the owner is more financially exposed. It also puts their primary residence at risk.
All of this means it is a more sound approach to improve cash flow, starting with one property. When the mortgage is amortized, the cash flow will rise significantly and allow the owner to purchase another property.
After buying another rental house, focus on paying off the home loan as quickly as possible. Once the mortgage is fully amortized, cash flow will be substantial. In fact, cash flow will be large enough to save enough cash to buy yet another property outright.
By following this methodology, both goals are obtainable. You’ll receive a healthy cash flow and continue to grow your real estate portfolio.
Keep in mind, you should not put your primary residence at risk to obtain more investment rental properties or to buy houses to flip. If you take a smart approach, be patient, and take your time, you’ll make better decisions. This way, you’ll enjoy a nice cash flow as well as grow your number of property.
A Study on Different Forms of Invoice Finances added 12-5-2016
Invoice factoring and invoice financing, similar but different solutions for collecting receivables, are two ways to keep cash coming in, even when customers aren’t paying their outstanding invoices.
Invoice factoring works by taking ownership of outstanding receivable invoices due to your business and collecting through a third-party, called a “factor.” The third-party collector or factor pays you the entire amount of the invoice, minus a small fee (generally 1 percent to 5 percent). That’s it; you are paid the money due and the invoice factoring company collects the receivable from the owing party.
Invoice financing is somewhat the same because it does charge a fee. However, it works differently. Your business is advanced 100 percent of the outstanding invoice amount and repays the short-term advance over a period of weeks or months, plus a fee. Unlike an invoice factor, though, you are still responsible for collecting the money from your customers.
Why Businesses Choose Invoice Factoring
There are several reasons opt for invoice factoring. First and foremost is the quick funding, giving a business the cash it needs without having to wait for their customers to pay.
Another reason is it takes the pressure and frustration away from having to wait out slow-paying customers. Instead of having to constantly send invoice reminders, you are free to run your business.
Invoice factoring also does not require good credit, either business or personal. While some small business owners can apply for traditional bank financing, others will have more difficulty in being approved. Even businesses with great credit and plenty of collateral must still wait weeks or months to be approved for a loan.
Yet another advantage invoice factoring offers is it takes the guesswork out of when you’ll get paid what you are due from your customers. It’s not just the inconvenience of not being paid on time that’s problematic, it also the fact you cannot plan for expenses without knowing when you’re going to be paid.
For businesses with several outstanding or overdue invoices, factoring makes good financial sense because it’s a small price to pay to have cash-on-hand. It allows business owners to make payroll, pay for inventory, supplies, equipment, or meet other necessary expenses. And it does so in a short time frame without having to apply for a business loan.
About Unsecured Business Finance Loans added 11-1-2016
Many entrepreneurs and business owners are familiar with commercial bank loans. An application, with financial documentation, is submitted to a bank. The bank reviews the paperwork and requires collateral to approve the loan. The applicant agrees and obtains capital funding. That’s traditionally the way the commercial loan process works, but now, unsecured business finance loans are a different way to fund a business’ needs.
About Unsecured Business Finance Loans
So, what are unsecured business finance loans and what benefits do these debt instruments offer? Here’s what you need to know about unsecured business finance loans:
No Collateral Requirement
Unlike traditional loans, unsecured business finance loans require no collateral from the borrower. Much like a revolving line of consumer credit, unsecured business finance loans provide capital without having to commit assets. Although higher rates are typically involved, the burden of providing substantial collateral is eliminated, making it a great trade-off for small businesses.
High Approval Rates
It’s certainly no secret banks are very risk averse and this is precisely why these institutions require not only collateral assets but also, significant financial disclosure. Conversely, unsecured business finance loans are more easily accessible and do not have the various barriers to capital associated with traditional loans.
Traditional commercial bank loan approval processing is notorious for their length of time. It can take several weeks or months to receive approval. This is because all the paperwork must be evaluated and the collateral must be appraised. That takes a long time. But, unsecured business finance loans are different because there’s little paperwork involved and there is no need for collateral.
Mediocre and Poor Credit Okay
Yet another barrier to traditional bank loan approval is the need for good to stellar credit. Moreover, both the applicant business and the owner must have good credit to be approved in the majority of cases. But unsecured business finance lenders aren’t as strict, putting less emphasis on commercial and personal credit history. This is one of the main reasons of their high approval rates and also why so many small businesses choose unsecured business finance loans over traditional bank loans.
Flexible Repayment Options
A huge advantage of unsecured business finance loans is the ability to choose from several repayment options. Depending on the lender, borrowers are able to repay weekly, bi-monthly, monthly, or in other intervals. In addition, some unsecured business finance loans are payable as a percentage of the small business borrower’s credit card transactions. Such flexibility provides businesses with helpful options for easy repayment.
What You Need to Know about SBA Loans
Created in July 1953, the Small Business Administration is a government supported an entity which promotes independent commerce through business development, access to capital, and additional functions.
But, surprisingly, the Small Business Administration does not actually loan money. Instead, it serves as a type of partial-repayment cosigner, which is why collateral is typically needed to acquire an SBA loan. Here are some more things you need to know about SBA loans:
The SBA imposes interest rate limits. Since the Small Business Administration is a government agency, it is empowered with the right to restrict interest rate charges. In 2016, the maximum fixed rate ranges from 3.5 percent to 4.75 percent. While the allowable variable rate is approximately 8.25 percent.
There are multiple SBA loan programs. Because the agency’s mission is to help small business, it offers a number of loan programs. Loan amount ranging from $5,000 to $5 million, to meet the needs of many different businesses.
SBA loans are used for different purposes. While most people associate a business loan with start-up capital, SBA loans serve more purposes. For instance, funds can be used to refinance expensive debt, purchase equipment and/or inventory, expansion, or even to buy real estate.
Repayment terms are the longest with SBA loans. Unlike many other types of traditional business loans, SBA loans have long repayment terms of 5 to 25 years. In addition, the SBA also offers revolving credit lines. Of course, the loan terms depend on the loan type, as well as the applicant’s credit and other factors.
Less than perfect credit is okay but good credit is better. Another aspect that sets SBA loans apart from traditional lender debt instruments is less than perfect credit is okay. However, understand that poor or even mediocre credit applicants will have fewer choices and less access, though this does not mean any access.
Another positive is SBA loans are ideal for minorities and also help with disaster relief when necessary. Last but not least, extensive documentation is part of the SBA loan process, so expect to provide a lot of financial statements. Understand the application process will take time because two entities (the lender and SBA, will go over the documentation.) For help with Texas SBA Loans please contact us.
Real estate investing can be very lucrative. Added 9-3-2016
It can also mean financial ruin. Like any other venture, it pays to be prepared and have a well thought-out game plan before jumping into the real property market.
To be sure, there are substantial sums of money going into real estate investments but the return on investment can be increased simply having realistic expectations. About Real Estate Investments Real property whether single family homes, rentals, multifamily or commercial can bring sizable returns. However, it’s important to know which will best suit your personality and be the most cost feasible. Too many real estate investors purchase a property only to find the adage, you bought it, you own it is inescapable.
Knowing current market conditions is helpful but learning previous trends can be advantageous as well. Making Money in Real Estate Investments Money can be made in real property investments. But the most successful investors are those who understand the fundamentals and seek out advice from that in-the-know. A trustworthy broker or agent should be the first place you start. Get recommendations and references, then interview a few brokers or agents. Here are some more useful real estate investment tips: Know When to Say When A good portion of first time investors make the huge mistake of not knowing when to say when.
In other words, purchasing a property than going all-out to make it marketable. Some even begin personalizing the space without being aware they are doing so. Stay object. New appliances might look bright and shiny but gently used appliances with a bit of elbow grease will do the same trick. Location, Location, Location The cliche is true.
Real estate investing is about location, location, location and always will be. Don’t just look at the property, look at the entire neighborhood. Is it near schools? Is a grocery store nearby? Is it next to an industrial area? Carve Out Your Niche Rent-to-own. Buying and flipping. Renting. All will make money. The question is which best fits you? If you rent, be prepared to pay “carry costs” during vacancy periods.
Rent-to-own properties provide a long-term income but can also cost thousands of dollars should the buyer default. Flipping only works if you put less into it than you sell it for–keep costs to a minimum. Build Relationships with Service Providers No matter your strategy, you’ll need appliances repaired or replaced. Paint, roofing, plumbing, electrical and other work. Establish relationships with providers that meet your expectations.
All about Commercial Bridge Loans added 9-2-2016
A commercial bridge loan is a type of short-term, debt instrument financing. It provides borrowers with a number of options and advantages. Unlike the heavy restrictions and laws governing traditional mortgages, commercial bridge loans are an ideal solution for many businesses and property investors.
Here’s all you need to know about commercial bridge loans.
All about Commercial Bridge Loans
There are three parties involved in a commercial bridge loan: a lender, a loan originator, and the borrower. In the past, commercial entities, such as small businesses took out a loan from a bank or credit union. A bridge loan is also known as hard money or as private money because of the way the financing is made available.
Here are some of the key distinctions between traditional financing and commercial bridge loans: ● Lending restrictions. Today, the Dodd-Frank law presents a number of problems for lenders and therefore fewer short-term loans are available to business owners. A commercial bridge loan meets the needs of businesses where there is a gap in traditional lending.
● Length of the term. Commercial bridge loans generally come with a slightly higher interest rate but the extra expense is substantially offset by the length of term, which is typically a year.
● Cash-flow. In general, the purpose of obtaining a commercial bridge loan is to buy another property to generate a positive cash flow. It allows businesses without the necessary free capital to make a cash purchase. Here again, the slightly higher interest rate is significantly mitigated because the new property provides a source of revenue.
● Repayment options. Unlike a traditional loan, such as a mortgage debt instrument, commercial bridge loans often offer repayment options. For instance, borrowers have the ability to opt to pay the bridge loan before or after permanent financing is secured.
● Residential and commercial applications. Another benefit of bridge loans is the ability to purchase a residential or commercial property. For homeowners wanting to buy new construction or a resale and will not sell their current properties before purchasing another home, this is a great option. In addition, the same applies to commercial borrowers.
● Easier qualification. Applying for a traditional commercial loan is a cumbersome and difficult approval process. Commercial bridge loans are much different because they are short-term and because the lender charges a slightly higher interest rate. This makes loan approval qualification less restrictive.
● Customization. Another distinct advantage to a commercial bridge loan is the lender’s ability to customize the debt instrument. Said customization is beneficial to the borrower because it can cater to a variety of particular needs more information about Texas Commercial Bridge Loans please contact us
Texas Construction Loans
www.proactivelendinggroup.cpm presents a short video about Texas construction loans for small businesses plus major Contractors. through proactive lending group of Texas including Dallas, Houston plus San Antonio https://youtu.be/-_QgnkOEnpE
Advantages of Owning a Small Business in Houston added 8-3-2016
There are several advantages of owning a small business in Houston, one of the nation’s most friendly corporate municipalities. First and foremost is the ability to set your own schedule and company structure.
This is especially beneficial for bootstrapping entrepreneurs, boutique businesses, as well as those beginning a side venture to develop as their full-time work. In addition, there are other benefits to owning a small business in Houston.
Advantages of Owning a Small Business in Houston
Many people dream of starting their own company. It provides an avenue for creativity and allows people to showcase their talents or share their passions. But there are more real world advantages of owning a small business, particularly in Houston, a sprawling and diverse city, with a large population. Tax Benefits One of the best aspects of owning a business is being able to deduct certain expenses.
These write-offs help to offset business-related expenses. Some examples are mileage or fuel, meals and entertainment, and insurance. What’s more, on the state and city levels, there are more incentives and tax benefits small businesses enjoy. Low Operating Costs Unlike some cities, Houston boasts an open utility market.
This means consumers and business have a choice of which companies they’ll use for utility supplies. Because there’s competition, utility companies must offer competitive rates, giving small businesses and consumers alike incentives and savings.
In addition, the state of Texas is a right-to-work state, allowing businesses owners to choose their employees without having to negotiate with unions. Community Support The Greater Houston Partnership is an organization which provides support to small business owners in a number of ways. It hosts networking events, provides educational materials, and more.
This helps small companies to navigate the business world with easy to understand guides. Challenges and Rewards Another wonderful aspect of owning a small business is the ability to choose which challenges to take on and it’s you who reaps all the rewards. You can follow your own heart felt passion while enjoying creating something unique. Owning a small business does more than the benefit you personally.
It allows you to become more involved with the community of Houston. You can give back, hire locals, and mentor. Control of Your Destiny Of course, there’s the old adage when you work for yourself, your customers are your boss. But that has a number of untold benefits.
You can select who you want to work with instead of being paired as an employee of someone else’s company. Moreover, you can grow it and take pride in creating something that’s your very own.For help getting a Houston Small Business Loan please contact us.
What You Need to Know about Business Expense Lending added 7-6-2016
There are some things you need to know about business expense lending, in particular, when you are using loan capital to operate your company. It’s common to use debt instruments to start a business, run a business, to expand a business, or explore new opportunities. Interest paid on the loan is generally tax deductible and that’s a great benefit to the owner, as well to employees because it helps to keep money in the business bank account. However, just securing a business loan is far different from how you can leverage it to the maximum.
Therefore, you need to know some key information about business expense lending. What You need to Know about Business Expense Lending Doing business is serious business in today’s ultra-competitive marketplace. Nearly regardless of the industry and/or the niche. The internet has fundamentally transformed how people earn a living but what it’s not done is changed the need for capital.
Sure, there are businesses started on a shoestring budget and many more which are bootstrapped (meaning sweat equity and pay as you go). But there’s always a need to maximize sales and keep as much money as you can from the hand of the tax man.
Here is some useful information about what you need to know about business expense lending:
● Asset purchases. When you use business loan money for purchasing assets, it’s a legitimate business expense. This means you are using debt smartly to help increase productivity for a bigger long term payoff.
● Business operating expenses. There’s absolutely no getting around operating expenses, even though these can be minimized significantly for service oriented businesses. Because there’s little way to avoid operating expenses, using debt capital here again is smart since it’s funding the business operation and not coming directly out of pocket.
● Business interest expense can be tax deductible. The interest you pay on a business loan can be tax deductible, if it’s demonstrably used for legitimate asset purchases or operating expenses.
● Business interest expense might be non-tax deductible. If business loan money is used for non-business related expenses, these purchases are not tax deductible. Even if for a real business purchase, but no proof available, it’s best not to risk taking a deduction. Of course, you should always consult a licensed and experienced tax professional about what you can and cannot deduct. In addition, a certified public accountant can help to identify where you can save money on your taxes and in some of your business’ operations. For information about San Antonio small business loans please contact us.
About Texas Commercial Bridge Loans added 6-2-2016
If there’s one thing about commercial bridge loans, it’s the fact these financing alternatives provide a whole lot of convenience for many developers, corporations, and property investors. The reason a commercial bridge loan is so attractive is because of its ability to provide viable financing for a short term. For instance, commercial bridge loans are often used to purchase a property that will be sold quickly after buying or for commercial property that will be refinanced in the near term.
However, there’s more to know about commercial bridge loans. About Commercial Bridge Loans The namesake is a pithy description for its use. When short term financing is needed for a real estate purchase, the borrower might have plans to sell it soon thereafter or, to refinance it. It’s called a “bridge loan,” precisely because that is the instruments sole function: to provide financing for a short time for a commercial property between the buy and the next step. This next step is what’s often referred to by lenders as an “exit strategy.” In fact, that’s one part of qualifying for a commercial bridge loan.
Here are some helpful things to know about commercial bridge loans:
● Short term capital help. In the typical scenario, a commercial bridge loan is to provide necessary capital for the purchase of a property. For instance, a business owns a stand-alone suite of offices, which is under contract to close. But, settlement day is three months out and the business wants to purchase a different stand-alone suite of offices and does not have the capital to buy it. A commercial bridge loan is the right financing to make the purchase of the other stand-alone suite of offices even though the one owned is not yet officially sold. This provides the money to finance the purchase until the under-contract property is closed and money distributed.
● Rates. Generally, commercial bridge loans are loaned at rates a percentage point or more higher than the going base rate. These types of loans are also generally interest only, because of their short term and since these serve as temporary financing. ● Payment. Since commercial bridge loans are generally interest only payments, the full loan balance becomes due at maturity. The timing is strategic, intended to match the sale or refinance of a commercial property to pay the balance of the bridge loan in-full.
● Term. As indicated, commercial bridge loans are short-term financing, which means in-general, the term is six months. Of course, not all commercial bridge loans are six months, some have different length terms. For help with Texas Commercial Bridge Loans please contact us
How a Clean Construction Site can Enhance Construction Safety added 5-3-2016
We all instantly know a construction site when we see one. Often encircled by fencing, complete with “No Trespassing” signs and other warnings signage, towering machines are found throughout the zone. Noise emanates loudly from the site and dust flies through the surrounding air.
Behind it all is a world of tools, materials, and more, being used by various contractors to bring the project from start to finish. As the building goes on, debris is an ever present part of the process; and, it’s a real safety hazard. So, it is important to know how a clean construction site can enhance construction safety.
How a Clean Construction Site can Enhance Construction Safety
For those who routinely work in construction, there’s a vigilant awareness of dangers lurking everywhere one can look. It’s not only from the heavy equipment and various systems (electrical and plumbing), but also, from the sheer amount of debris generated on-site.
● It provides a better working environment. Construction debris is not only unsightly, it’s also a nefarious concealer of needed tools and materials. To keep the project on schedule and reduce contractor down time, a well organized site is needed at all times. However, if debris is scattered about, it becomes more difficult to locate what’s needed and that’s an invitation for injuries.
● A clean construction site is easier to manage. When a site is clean, it’s simpler to organize and this provides an opportunity to readily identify needed tools and materials. Instead of having to sift pile after pile, looking for this or that, it’s easier to keep track of what’s needed for the next phase of construction.
● Construction zones debris is dangerous. One of the serious hazards on a construction site is debris. When left unorganized and scattered around, it poses a tripping hazard and presents other dangers, as well. In addition, a clean site makes it less precarious for workers to navigate day in and day out, as the project move toward completion.
● A clean construction site helps to mitigate visitor accidents. When coming on-site to see the progress of a project, site visitors generally aren’t aware of the many dangers lurking about. In a clean zone, it’s less likely they will have an accident and a clean site has the added benefit of showing the progress already made. In addition to these benefits, a clean construction site means one that is free of hazardous materials which can not only harm workers, but the environment, as well.
Simple Ways to Improve Construction Site Safety added 4-4-2016
Construction site safety is of the utmost importance and being proactive and vigilant are a necessity on a daily basis. Electricians, carpenters, and other contractors face a number of dangers when on a construction site. There are heavy objects all around, electrical and fire hazards, hazardous materials, and much more. However, when simple ways to improve construction site safety are taken in advance and practiced regularly, the risk of accidents occurring significantly drops. Simple Ways to Improve Construction Site Safety All sorts of potential physical injuries are a real possibility when it comes to a construction site. Regardless if it’s commercial or residential, the very endeavor creates conditions which can be unsafe at any time. It’s vital to not only understand and be aware of such dangers, but also, to take steps to ensure the wellbeing of those on the job. Here are some simple ways to improve construction site safety: ● Keep the area off-limits to trespassing. It’s not only contractors who face danger on a construction site, it’s also unauthorized personnel. Out of curiosity or looking for materials and tools to abscond, unauthorized individuals make their way onto sites and are exposed to their many dangers. It’s very important to secure the site as much as possible to keep trespassers away. ● Store hazardous materials safely away. Before proper disposal, any hazardous materials should be clearly labeled and store safely away. Emergency wash stations and other safety equipment should be readily available, in addition. ● Ensure all contractors are wearing safety gear. When on-site, all contractors should wear safety gear appropriate to the situation. Unnecessary tragedies can be avoided simply by requiring and enforcing wearing of safety gear whenever on-site. ● Get medical attention immediately if symptoms appear. If a contractor is exposed to something dangerous, it is imperative to seek proper medical attention immediately. When an injury does occur, try to remain calm and call 9-1-1. Check on the safety of others when the injured party is being treated. ● Do not leave tools, equipment and materials on-site, overnight. Though most contractors are protective of their tools and equipment, in some instances, even the most vigilant will leave tools, equipment, and various materials on-site overnight. This should not be allowed as it provides an opportunity for unauthorized individuals to come on-site. Have a rehearsed, easy-to-follow evacuation plan posted in conspicuous places. There should be an evacuation plan in-place and rehearsed for the safety and protection of all contractors. Drills ought to be conducted so all contractors are aware of what to do in the event of an emergency.
Things to Ask when Selecting a Commercial Contractor for Your Project added 3-2-2016
Hiring the right commercial contractor requires a whole lot more than just going with the lowest bid. The old cliche about you get what you pay for could very well come to fruition and you’ll be stuck with a truckload of buyer’s remorse. The fact of the matter is, when you need a commercial or general contractor, you should do your due diligence in order to protect yourself and to get the best possible results.
For this to happen, you need to know the things to ask when selecting a commercial contractor for your project. Things to Ask when Selecting a Commercial Contractor for Your Project Okay, so you know that it’s quite important to stay within your budget and that’s where you ought to begin before speaking to any general or commercial contract. You should know your true budget, and, be sure to include a 15 percent to 20 percent contingency, at the very least.
It’s not at all unusual for something to go awry and you don’t want to be caught off-guard, having to make sacrificial changes in-order to stay within your budget. Once you know how much you can spend, here are the most important things to ask when selecting a commercial contractor for your project:
● “How many other projects are you currently working on?” This is crucial to know because it isn’t unusual for a commercial contractor to be working on more than one project at a time and you need to know his workload because it will probably impact your time to completion.
● “Who will be here day-to-day on the job site to oversee the work?” Most commercial contractors have a go-to individual, like a foreman, who will be on the job site every day. You should meet this individual to get a sense of his management style.
● “What other projects have you completed that are similar to this one?” You should hire a commercial contractor that has experience in bringing similar projects to life in order to get the best results.
● “What is a realistic timeframe from the beginning to total completion?” The longer a project goes on, the more money it will cost, in general. You should ask about the time it will take from the start of the project to completion.
● “What guarantees do you offer and what type and level of insurance do you carry?” Even the most experienced and savvy commercial contractor can have this or that go awry, so you should know what guarantees and insurance is in-place. For more information about Texas Construction Loans please contact us
Real Estate Investing Tips For The Novice added 2-2-2016
Real estate investing has made plenty of people rich over the years, especially when it’s a buyer’s market. Unfortunately, many novice investors end up losing money as they assume that investing in real estate requires no forethought. The reality is, people that are successful real estate investors have years of experience, and oftentimes, have gone through the costly trial and error themselves. Here are some of the skills that any real investor should have:
*Investing in real estate requires plenty of hard work and energy. It’s vital that anyone looking to make serious money is willing to put in the time and research necessary to make it a worthwhile venture.
*It’s important to take into consideration that in order to make money, money must be spent. There needs to be a solid capital investment from the startup of the investing venture. Many people opt to get loans from traditional lenders in order to make the first investment, but it’s only wise to do so if the money can be reasonably paid back.
*No one can or should invest without having a solid knowledge of the local real estate market. It makes sense to know which neighborhoods are desirable and what the asking price of the average property is.
*Real estate investing comes with a number of legal procedures during the selling, buying or renting period. It’s important to know laws, regulations, and the legal side of things before choosing to invest.
*Negotiation and communication skills are a must for successful investors. It’s important to know how to talk sellers in order to get a good deal. Additionally, finding the right renters or buyers afterwards will also require such skills.
*All investors should be professional in every aspect of their real estate dealings. That means they should know how to communicate, respond, and assess properties well.
*There are certain cases where it makes sense to invest money into fixer-uppers. However, these types of properties can become money pits if the investor isn’t careful, therefore, having a trustworthy inspector can help make wise choices.
If done correctly, real estate investing can bring a lot of income, but once again, it depends on the skills of the investor. The real estate market is always changing, so it makes sense to purchase properties when the selling price is low, and to flip them when the property prices in a locality increase. Sometimes, investors may also choose to rent out properties until the selling price increases to even out associated costs. In any case, it’s wise for any investor to do their homework and hone the correct investing skills for success.
Why You should Know Your Zoning when Shopping for Land to Build On-added 1-6-2016
So, you’re looking at buying a parcel of land on which to build. It might be for a residential single family home, a residential multi-family home, duplex, or, a commercial building. With this type of real property purchase, you’ll have to conduct extensive due diligence because the zoning laws, both current and future, will have a very substantial and direct impact on your land. Why You should Know Your Zoning when Shopping for Land to Build On In general, zoning is just that — zones designated for specific purposes. These include, but are not limited to: residential, commercial, industrial, agricultural, and more. In fact, residential can be subdivided, hence the term “subdivisions,” further designating proper use. Of course, these are not mutually exclusive — it is possible for a zone or even a parcel — to fall under two designations. Basic Zoning Laws Explained As mentioned, the most common zones are: residential, commercial, industrial, and agricultural. The laws pertaining to what is allowed on a property are referred to as “ordinances.” These zones are mapped by a local planning commission, and, the goal is to strike a balance to help a community grow and thrive. For instance, single family properties will not typically be surrounded by industrial factories. However, single family communities will be surrounded by commercial zones for retailers. Here are some key considerations to take into account before you commit to buying land to build on: ● The current zone. You can find this information at the local building department or planning office. A map will include all zoning designations and which zone each parcel falls into, be it commercial, residential, historic, rural (agricultural or farm), or industrial. ● Ability to adjust building plans. Should the property you’re interested in purchasing not be zoned for your intended use, that doesn’t mean you’re without options. One such alternative is to change your building plans. For example, you want to construct a three-story building, but the zoning ordinances restrict buildings to just two-story units. You might consider spreading the square footage out instead of up. ● Variances and special permits. Another option which might be available is to seek a variance or special permit to allow a use other than what the property is zoned for. The difference between variances and special permits is that a variance allows a landowner to use a property in a way that would otherwise be in violation of the law; while a special permit is sought for landowners who have been using the property for one purpose, but now, it’s been rezoned for another use.
Completing a Commercial project on Budget added 12-1
Commercial construction is quite different from building a private residential residence. Location and size are just two of the many differences, but also, cost, and of course, scope. In residential real estate, the property is built to house a family. However, in commercial real estate, a building is constructed for a multitude of purposes. It might be leased to professional organizations, such as engineers, architects, doctors, lawyers, or accountants.
It could also be used by trades such as electricians, plumbers, HVAC technicians, and others. In addition, it might also serve as retail space. Because of this wide scope, commercial real estate ought to be constructed to serve a group of industries. This is why it’s common to see buildings with lease tenants who are in similar industries. Before you build a commercial space, you ought to understand what’s in store. Here are some helpful commercial real estate construction tips to get started:
● Determine a realistic budget. Just like residential real estate construction projects, commercial real estate building needs a realistic budget. It’s best to begin researching and speaking with lenders well in advance of choosing a commercial real estate developer for constructing a site. Only after financing is in-place should you proceed because your budget is critical to the project.
● Develop a feasible design plan. While vision certainly helps to hone-in on a specific type of design, it’s only a guideline. What can be imagined and what can be produced are two completely different things. It’s important to consult an experienced commercial builder to learn what’s feasible and what isn’t in a building.
● Set a workable, realistic schedule. Another consideration is schedule, which can present real challenges. Unlike residential construction, commercial construction is subject to many aspects, which include environmental impact, use and zoning, and so on. As the owner, you will encounter many parties and deal with all kinds of different scenarios.
● Know there are project risks. In any construction project, there are inherent risks. It’s important to keep in mind and accept that real risks are associated with commercial construction.
● Keep lines of communication open. Once you’ve chosen a builder, you can’t just leave everything up to the developer. Keep an open line of communication throughout the construction project. Complications are nearly inevitable in commercial construction and you’ll do yourself a big favor by being actively involved through the process.
Commercial Real Estate Closing List added 11-4
As we learned in one early 90’s movie drama, in the world of real estate, sales professionals should eagerly observe and practice their ABC’s, and, always be closing. Off the silver screen and into the real world of the commercial real estate industry, things are quite different.
Though there is a definite drama component and some anxious moments, it’s largely uneventful. The reality can easily morph into complacency and things can be missed. This is especially true at settlement time. Unlike residential real estate, where closings are generally handled by title companies, commercial real estate settlements are typically transacted by attorneys. An eye for detail is a must to ensure there are no loose ends, since there are many line items to go over.
Here’s a helpful commercial real estate closing checklist for reference:
1. The promissory note.
2. Personal guarantees (these can be partial or total and are generally required by the lender).
3. The loan agreement.
4. The mortgage.
5. Lease and rent assignments.
6. Security agreement.
7. The Uniform Commercial Code-1 or financing document.
8. Borrower’s good standing and borrower’s ability to repay.
9. Title insurance.
10. Land title survey.
11. The rent roll.
12. Certified copy of all current leases in the building. In addition to these there will also be a lessee estoppel certificates, attorney agreements, non-disturbance and lessee subordination, lien searches, an appraisal, environmental impact study/statement, site improvement study, proof of hazard insurance, underwriting documents, borrower’s attorney’s legal opinion, and an errors and omissions agreement, or, compliance document.
As you can see, this checklist is quite extensive and every document must be thoroughly reviewed by the closing facilitator. Each item on the checklist is important to to a successful settlement and copies should be furnished to all interested parties.
It’s also important to keep in mind these transactions are typically business related and there are many parties which do not participate in the closing. Unlike residential real estate, which is less complicated, only involving two parties, commercial real estate can have multiple parties. These can be a group of private investors, a real estate fund (real estate investment trust or REIT), commercial organizations, not for profit and nonprofit entities, as well as other parties. In addition to this, mistakes made or uncovered during commercial real estate closings can easily take weeks or even months to resolve. It’s clear that commercial real estate transactions are quite complex and have requirements that are not found in residential closings. Therefore, it’s best to review the settlement documents ahead of the actual closing to ensure a smooth transaction.
How Construction materials can benefit Builders
Any building project take time to complete and is usually done in phases. When it comes to construction, there are always concerns about budgets, contingencies, and time lines because these are all important. Builders base their reputation on delivering on their promises, and, these three aspects are key to success.
Normally, construction materials, such as plaster, are mixed on-site by trades people. This not only takes time, but also requires the right combination of components in order to yield a good batch. One way to reduce time, effort, calculation, and mistakes is to use ready mix construction materials. These are readily available and very useful. Here’s how ready mix construction materials benefit builders:
- Saves time on the job. As mentioned briefly above, ready mix construction materials save time and effort. Since these are pre-mixed, it’s easy to render necessary materials in less time. What’s more, it cuts down on errors in calculating component amounts, which can lead to costly materials waste.
- Helps to reduce completion time. Because ready mix materials take less time to render, it help to reduce the over time to project completion. Shaving off precious minutes here and there can really pay-off in the long run. When planned right, the amount of time saved can be significant.
- Reduces materials costs. There’s no doubt that construction materials are costly. This is why so many contractors use materials left over from other projects on future builds. It also saves time because there’s no time wasted on ordering and receiving — the materials are on-hand and ready to go.
- High quality materials. Ready mix construction materials are very high quality with technological advancements. These materials are better than traditional materials, reducing time in application and being more environmentally friendly. In addition, energy efficiency is at the center of the development and production process when manufacturing these ready mix construction materials.
Another benefit of ready mix construction materials is that it takes less time to train people that are just coming into the trade. Builders that are mentoring new hires will be able to get more production from new team members because these reduce the learning curve. This also helps to reduce costly mistakes when mixing raw materials on-site.
Builders using ready mix construction materials are reaping big advantages. With new so many product choices and new materials being made available, contractors can expect to produce high quality projects in less time while reducing costs. That’s a winning formula for any serious business owner. For information about Texas Construction Loans please contact us.