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Golf Course Commercial Mortgages

By plrprousers | October 3, 2009

Specialized commercial real estate is always among the most problematic commercial finance situations for business borrowers. A particularly challenging set of circumstances both for initial purchases and refinancing is common for golf course mortgages.

Because fewer lenders are currently offering competitive business finance terms, this is a further obstacle for an already difficult golf course business loan environment. There are fewer regional and local banks offering golf course financing compared to a few months ago. Other specialized property financing such as funeral home loans is also experiencing similar difficulties.

When they are willing to provide commercial loans, regional and local banks will probably offer short-term business financing instead of a long-term business loan for golf course financing. The maximum percentage of value for business financing is a key finance term that can differ from one lender to another. Particularly with business loan terms for length of loan and percentage of value, it is critical for borrowers to avoid unrealistic commercial mortgage terms for golf course refinancing or acquisition.

There are several problems found in golf course mortgages that are not typically seen in other commercial loans. It is likely to be more complicated than the acquisition business financing when the primary goal is business loan refinancing for golf course financing. The commercial property loan valuation is usually much less than the overall business valuation for a golf course business loan. 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 golf course financing, there should be reasonable commercial financing fees during the early stages of the business loan process. Many business lenders have used the reduced alternatives for golf course acquisition, building and refinancing to take advantage of business owners. Commercial borrowers should be aware that charging excessive early fees of $25,000 and higher is a common tactic.

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 golf course 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 business loan expert should be helpful to anticipate potential problems with complex business financing. Since golf course business loans are among the more difficult business finance transactions that a commercial borrower is likely to encounter, the use of preliminary business consulting should be helpful in obtaining better terms and avoiding serious problems.

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