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

By: Stephen Bush

A commercial mortgage for buying a business involving a funeral home or golf course is usually a difficult business loan to arrange. Funeral home financing and golf course financing involve problems not found in most commercial loan situations. Refinancing for both of these business categories is likely to be more complicated than the original business financing for purchase.

Reduction in Commercial Lenders - Golf Course and Funeral Home Financing

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

Business Financing to Buy a Business Opportunity

Much like a business loan to buy a golf course or funeral home that includes commercial property, workable business opportunity financing is difficult to arrange. A commercial loan to buy a business opportunity is a special variation of business financing in which commercial property is not included in the purchase price. The commercial property needed will usually be leased on a long-term basis.

Avoiding Problematic Commercial Mortgage Terms

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

Difficulties with Stated Income Commercial Mortgage Financing

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

When Commercial Real Estate Loan Value is Less Than Business Value

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

Funeral Home and Golf Course Financing - Avoid Excessive Business Loan Fees

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

Lender Choices - Golf Course Financing and Funeral Home Financing

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

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

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

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

Contact Steve Bush at The AEX Commercial Mortgage Loan Guide for business loan solutions
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