A business loan to buy a business involving either golf courses or funeral homes is among the most difficult commercial mortgage scenarios. Golf course financing and funeral home financing involve special complexities not found in typical business financing situations. In both cases refinancing is usually even more difficult than the commercial loan to purchase.
Fewer Business Lenders - Funeral Home and Golf Course Financing
To further compound the already difficult business financing for either a funeral home or golf course, fewer commercial lenders are providing competitive commercial mortgage business loan terms. There has especially been a significant reduction in the number of local and regional banks providing commercial loan programs for both funeral home loans and golf course loans.
Business Opportunity Financing to Buy a Business
A commercial loan variation in which commercial property is not purchased involves a business loan to buy a business opportunity. The commercial property in this situation is commonly leased instead of purchased. Like business financing to buy a funeral home or golf course, it is usually difficult to obtain dependable commercial financing to buy a business opportunity.
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.
Stated Income Business Financing Difficulties
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.
Business Loan Difficulties - Commercial Mortgage Loan Value and 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.
Funeral Home Financing and Golf Course Financing - Avoid Problem Lenders
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.
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