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Funeral Home Commercial Mortgage Loans
By plrprousers | September 14, 2009
Specialized commercial properties are among the most difficult small business finance situations for commercial borrowers. Substantial challenges for commercial refinancing and acquisitions are typical for funeral home business loans.
The fact that fewer business lenders are currently willing to offer competitive small business finance terms is a further complication for a difficult funeral home business loan. There are fewer regional and local banks offering funeral home financing compared to a few months ago. This is also true for other specialized commercial property loan situations such as golf course business loans.
Business owners should be ready for the possibility that the small number of active regional and local banks will probably offer short term financing instead of long term financing for funeral home loans. Another key term that can vary significantly is the percentage of value for the commercial financing. Particularly with commercial mortgage terms for percentage of value and length of loan, it is of critical importance to avoid undesirable business loan terms when refinancing or buying a funeral home.
There are some serious potential problems found with funeral home mortgage loans that are not usually apparent in other commercial mortgages. When the primary goal is business refinancing for funeral home financing, it is likely to be more complicated than the original business financing for purchase. The commercial real estate loan value is often less than the business value for funeral home business loans. The problem with this disparity is that many business lenders will provide a business loan that includes only the commercial mortgage loan value, and this will produce significantly reduced business financing.
For funeral home financing, there should be reasonable commercial financing fees during the early stages of the business loan process. Several lenders have used the shortage of reduced options for funeral home refinancing, building and acquisition to take advantage of commercial borrowers needing this specialized help. A common tactic is to charge excessive fees of $25,000 and more even if the commercial financing is not finished.
For this specialized business loan category, availability of adequate lenders has shrunk. Prudent choice of a lender will be a prime factor in securing a viable funeral home mortgage. It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier.
The use of a commercial loan expert should be helpful to anticipate potential problems with complex business financing. The use of preliminary business consulting should be helpful in obtaining better terms and avoiding serious problems since funeral home business loans are among the more difficult commercial financing situations that a commercial borrower is likely to encounter.
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