Although there is really no “commercial subprime mortgage” sector like there is in residential, there are 3 types of commercial mortgages programs that are designed for borrowers with difficult situations.These loan programs include:1. Stated income commercial loans
2 . Commercial hard money
3. SBA 7a loans.Commercial Stated Income LoansCommercial stated Income loans were designed for businesses or investors that do not show enough income on their tax returns to qualify for traditional loans. For example restaurants, automotive repair or other high cash businesses are prime examples of business that often make enough money to support the mortgage debt, but owners often do not report all earned income on their taxes.The primary benefit of this program compared to other “subprime loans” is longer fixed period, with 20- 30 year amortizations schedules and high leverage (often up to 75% on refinances and even 90% loan to value on purchases).The negatives include high prepayment penalties and rates are often 2 -5% higher than typical bank financing (though it won’t be available to a borrower that didn’t show enough income on their tax returns to qualify).Commercial Hard MoneyCommercial hard money loans are the ultimate “commercial subprime” loans for investors and occasionally for business owners. Hard money lenders are really interested in properties equity or the properties ability to pay the lender back in case of default. Loan to values rarely exceed 65% and values are often further reduced by tough appraisals.The primary benefit of hard money is the speed in execution (3 weeks to close is not unusual) and lenders do not generally care about credit scores. The negatives with hard money include interest only rates in the 12-15% range with points in the 3-5% range.SBA 7a LoansIf hard money loans are the ultimate “subprime loans” for investors, the SBA 7a loans are the ultimate for business owners. Highlights include the ability to refinance up to 90% loan to value, credit scores as low as 500 are acceptable, and debt coverage ratios can be as low as a 1.1 – with the ability to use projections for future income.Common objection to the SBA 7a program include the floating rate and expensive guarantee fee that the SBA demands. Both of these negative characteristics can be eliminated though, for example there are banks that offer a 5 year fixed version with the ability to roll the guarantee fee into the rate.
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Internet and Businesses Online – Making Money Online
Making money online has become a fast growing trend these days. More and more people now look to the internet to reach people. These are prospects that never existed before, and now the opportunity to turn them into customers is here because of the power of the World Wide Web.This steady rise of doing business online and the number of people who now rely on the internet and online businesses to provide them with what they need in terms of products and services is slowly changing how the world views businesses and how they run it.Usually, what it took in the past to run a successful business is to be good at what you do or have a good product to sell and to market it through radio, newspaper and other mediums to get people to patronize your goods or your services. These days, running a business online can mean so many things and can reach so many people that having a business up and running can actually be done in a matter of hours even when you do not have your own product to sell.You can have a business online and make money from home by selling other peoples products and receive a commission from each sale. You can also have a business online by selling your skills and expertise like writing, graphic art, and programming to people around the globe. You can sell expertise online to other businesses with outsourcing businesses and joint ventures. You can make a lot of money from this opportunity without having to get out of your pajamas or setting foot outside your home.
How to Avoid Fraud When Buying Business Online
Everything is available online nowadays. From clothing, to house furniture, and even car equipment, you name it, the internet has it. It’s no wonder that even companies are joining in online listings in hope to find business buyers. That makes it easy for those who are interested to buy business online. But how sure are you that the business that you’re interested to buy is legit, and how do you protect yourself from online fraud.
Read on to find out how you can protect yourself from fraud business listing sites.Check the reputation of the website-Once you land on a business listing page, check the legitimacy of the site. How do you do that? Navigate the page; go through the different pages of the site. If an ad keeps on appearing, to the point that it hinders your browsing, or if there are too many links (some of them are not related to the business), most likely it is a farm site. If you notice such entities, hit the back button immediately and look for a more reliable listing site.Check the business listings-Now, if the website doesn’t have link farms and from the looks of it, it’s a legitimate online site where business for sale is available, then you may now proceed to looking into the business listing on the site. And you’re asking how would you know if the businesses on the site are legit? Take a look on the company profile. See if it includes all the vital information that as a buyer, you need to know. If there are some inconsistencies or if you notice that the company is not credible, you might as well go over to the ones that you think would not cause you any trouble once you click the buy button.See if the site is secured-If you show interest on buying the specific company on the list, the site would prompt into a contact form where you’d need to input your personal information so that the site can further assist you. However, it should not ask for more than your name, email address, phone number, your location’s zip code or your city. It shouldn’t ask for your credit card number or other information that would lead to your finances. If it did, don’t fill it up and leave the site.Buy and sell business online sites make the business-buying transaction in a breeze. Although, however enticing it may be, you should remember to protect yourself. The online world is a tricky one. So always be wary.