| This real estate and business financing article | | | | and (3) working capital management programs for |
| discusses a concept which is referred to here as | | | | credit card processing. |
| "Thinking Outside the Bank". It is meant to be a | | | | Business Loan Investing Options - Commercial Real |
| variation of the well-known "thinking outside the box". | | | | Estate Investment Property Loan Programs - |
| Despite the prominence of traditional banks, they are | | | | Two of the most common commercial mortgage |
| not the only viable source which should be considered | | | | difficulties experienced by commercial borrowers can |
| for a commercial mortgage or commercial loan. There | | | | be avoided if they "Think Outside the Bank". The first |
| are many reasons why a commercial borrower might | | | | business financing situation is the prevailing practice of |
| not go to a traditional bank for a commercial real | | | | traditional banks to avoid most special purpose |
| estate loan or other business finance circumstances. | | | | investment properties (such as funeral homes and golf |
| Business borrowers have more commercial mortgage | | | | courses). |
| and commercial loan alternatives than they realize. As | | | | A second business loan possibility is the frequent |
| noted above, I refer to these business financing | | | | practice of many commercial banks to add recall and |
| alternatives as "Thinking Outside the Bank" because a | | | | balloon conditions to their commercial loans. The bank |
| typical commercial borrower probably believes that a | | | | can then require early payoff of the commercial real |
| bank is the best source for a business loan in business | | | | estate loan under stipulated conditions. Both business |
| investing situations. Non-traditional business lenders are | | | | financing situations can easily be prevented by a |
| usually viewed as having the competitive edge for | | | | non-traditional lending source. |
| many common commercial financing and commercial | | | | Business Financing Choices - Business Cash Advance |
| real estate investment property financing scenarios. | | | | Programs - |
| In some cases a traditional bank will offer to provide a | | | | Most businesses that accept credit cards will qualify |
| business loan but will attach excessively stringent | | | | for a business cash advance with their credit card |
| terms and covenants. In other cases a traditional bank | | | | receivables. Traditional banks will typically be very poor |
| will decline the commercial mortgage outright, perhaps | | | | candidates to consider if a business needs assistance |
| because they do not even provide business financing | | | | with credit card factoring and business cash advances. |
| to the commercial borrower's particular industry. In | | | | Because successful business owners typically need |
| either case, the commercial borrower is likely to benefit | | | | more working capital than they can obtain from a |
| by "Thinking Outside the Bank" for their business | | | | bank, it is important for a business to "Think Outside |
| investing efforts. | | | | the Bank" with non-traditional lenders to help with this |
| Commercial loan borrowers might feel that a bank is | | | | working capital management function. |
| their most likely source for business financing. | | | | Credit Card Processing Programs - Working Capital |
| However, since traditional banks usually focus on a | | | | Management Choices - |
| few types of businesses and commercial real estate | | | | The selection of a credit card processing service can |
| investing, non-traditional business lenders should be | | | | be critical in improving the cash flow of a business with |
| emphasized for any business loan situation. Therefore | | | | significant credit card activity. Credit card processing |
| the recommended business finance and commercial | | | | providers can be combined with the credit card |
| mortgage strategy discussed in this article is to "Think | | | | financing process mentioned earlier. |
| Outside the Bank". | | | | In coordinating a business cash advance and working |
| As I reported in a previous business financing and | | | | capital business loan program, it is usually possible to |
| investing report, in many commercial mortgage | | | | achieve improvements in the business owner's credit |
| situations it is common for a local bank to assess | | | | card processing services. Traditional banks are usually |
| stricter commercial loan conditions than would typically | | | | not competitive in providing assistance with a business |
| be seen in a competitive business loan scenario. Such | | | | cash advance using credit card receivables. So it is |
| banks can often take advantage if there are few | | | | likely that a non-traditional lender will be the major |
| business lenders in their market. | | | | source of competitive help with credit card processing |
| A prudent response by business borrowers is to | | | | improvements. |
| consider non-traditional commercial mortgage options. It | | | | A closing business financing and commercial real |
| is not necessary for borrowers to depend upon | | | | estate investment property financing thought: I have |
| traditional banks for business loan strategies. For typical | | | | written an earlier business loan article about |
| commercial loan scenarios, a non-bank lender can | | | | commercial lenders to avoid. It should be noted that |
| often provide better business financing terms because | | | | there are in fact both traditional and non-traditional |
| of the competitive market situation. | | | | (non-bank) lenders which should be avoided. |
| There are at least three business financing situations in | | | | When business owners are "Thinking Outside the |
| which business borrowers will typically experience that | | | | Bank", they should be ready to avoid troublesome |
| non-traditional lending sources can provide conditions | | | | non-traditional business lenders in their investment |
| that are best for the borrower: (1) commercial real | | | | quest for worthy working capital management dealing |
| estate investment property loan programs; (2) credit | | | | with commercial real estate loans, credit card financing |
| card factoring and business cash advance programs; | | | | and credit card processing. |