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Funeral Home Loans and Golf Course Financing

By Stephen Bush

Republish: EasyPublish™ Published: 03Jun2009 Word count: 820 Viewed: 365 time(s) Get Free Content For Your Site

Specialized commercial properties are among the most difficult small business finance situations for commercial borrowers. Funeral home financing and golf course loans present a particularly challenging set of circumstances both for initial purchases and refinancing. The recent chaotic business lending climate has made a bad situation even worse for most small business loan programs involving specialized businesses such as golf courses and funeral homes.

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, fewer business lenders are currently willing to offer competitive small business finance 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.

Buy a Business - Business Opportunity Financing

Business financing to buy a business opportunity is a special commercial loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find.

Avoiding Problematic Commercial Mortgage Terms

Some regional and local banks will probably offer short-term business financing instead of a long-term business loan for golf course financing and funeral home financing. Another key term that can vary significantly is the percentage of value for the commercial 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 loan conditions involving length of loan and percentage of value.

Stated Income Business Financing Difficulties

Stated income small business loans (involving minimal or no income verification for the borrower) are not widely available for commercial real estate financing in the current restrictive lending conditions. Although a stated income commercial loan has a certain number of benefits when available, the use of stated income business financing is not recommended for a funeral home loan or golf course loan. A major limitation of a stated income commercial mortgage is the maximum amount which can be financed. A further limitation is the low percentage of value for stated income commercial financing involving either golf course financing or funeral home financing. To emphasize our main point, a stated income approach to financing golf courses and funeral homes is not recommended even when it might be an option (which is not currently the case).

When Commercial Real Estate Loan Value is Less Than Business Value

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

Exorbitant Commercial Loan Fees for Funeral Home and Golf Course Financing

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

Fewer Commercial Lender Options for Funeral Home Loans and Golf Course Loans

As already noted, the availability of suitable lenders for this specialized type of business loan is shrinking. A viable commercial mortgage for funeral home financing or golf course financing will depend upon a prudent choice involving the lender. It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier. A borrower seeking to buy a business should be prepared in advance for the limited number of acceptable business financing lenders for golf course financing and funeral home financing.

One Solution - Business Consulting and Small Business Finance Experts

In complex commercial loan and SBA business loan financing, the use of a small business finance consulting expert should be conducive to a better understanding of difficulties to anticipate. Since funeral home loans and golf course loans are among the more difficult commercial financing situations 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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