Overcoming Business Loan and Commercial Mortgage Finance Problems

One of the most difficult business loan scenarios occurs when a commercial borrower is rejected for either a commercial mortgage or commercial loan. There are five specific reasons that account for a healthy majority of business finance rejections. These common business financing application problems are particularly applicable to commercial real estate investment property financing.

Commercial borrowers are likely to be confused when their commercial loan application is turned down and will probably be unsure as to why it happened and what to do next. For each of the five major reasons that a bank might decline a commercial mortgage, a practical strategy is provided for converting the declined commercial real estate loan into an approved business loan.

MBC funds: Providing an immediate access to your business financing.

People run business to earn benefits and to make all its resources to the full use. However, people due to increasing competition today, takes risks calculated for their business objectives. Here, money also plays an important role. Risk and crisis are an integral part of any business and the more apt you are at managing business crisis better is your chance to prosper. However to survive and recover from a crisis is the most important element required by any entrepreneur. Nature of the business is in two categories. They are new or seasoned business. Obviously the business finance depends on this nature. Whatever may be the type, the fact is there are profits earned and these profits are helpful for them to do some activities like buying machinery, tools, furniture, land, raw material, expenditures etc. This often helps them to develop their business as well.

Corporate finance is the other term coined for the taking aid from the government, in order to set your business. There are many banks in America who are willing to give loans on business schemes. Brokers’ agents and financial institutions are also there to help you and ready to explain you about the lengthy procedures for finance of a new business.

Working Capital Financing & Asset Based Lenders

Information on working capital financing and asset based lenders in Canada. These solutions solve cash flow challenges faced by Canadian small and medium enterprises in their search for business credit.

Asset based lenders could well be providing your competitors with all the working capital and cash flow solutions you need. The acronym for this type of financing is ABL; simply speaking its daily cash flow provide against your current, and sometimes not so current assets.

Put simply, this facility allows you to margin your receivables, inventory and, should you choose, fixed assets and real estate. You are probably saying to yourself that you could arrange financing on your own those fixed assets and real estate. However, you can use those assets as collateral for your daily revolving line of credit.

So asset financing typically doesnt bring debt or long term loans to your balance sheet; you are just leveraging your assets (thats the A in ABL) for daily cash flow and working capital.

Why are we claiming that this type of working capital financing just might be your key to business success? Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases, you might have discovered it’s been a challenge to get business lines of credit of any manner.

So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate? The answer is simply that if your firm has a combination of 250 thousand in working capital assets you are immediately eligible for asset based lines of credit.

We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but thats not our key focus for todays information exchange. For straight A/R solutions we recommend confidential receivable financing, which provides you with the ability to bill and collect and finance your own receivables on your own.

Why should you consider these kinds of offerings? Simply because your firm might be in one of a number of special situations, such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing to quickly for traditional Canadian chartered banking financing, etc.

The benefits to this type of business financing must by now be pretty obvious. Its all about access to working capital financing and cash flow that you couldnt access before. Assets that couldnt be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.

There are in fact other short term asset based finance solutions that might provide you with the bulge financing you need. They include: sale leasebacks, SRamp;ED tax credit loans, purchase order financing, factoring, working capital term loans and merchant cash advances/short term cash flow loans.

If you want to investigate asset based lines of credit for your firm (remember, your competitor probably already has) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.

Business Financing In Canada . Know Your Options for Funding And Finance , Loans and Monetization

Sources of business financing. What we really mean is do you as a business owner of manager really understand the type of funding your company might need, and moreover what alternative to loans and finance exist.

Capital has always been a challenge for Canadian business, more so in the SME sector. While larger corporations have Chartered banks, advisors, and access to capital pools both public and private the ‘ little guy ‘ in the small and medium enterprise sector struggles to search for capital.

Working Capital Options in Six Words

This report is designed to produce a concise explanation of current small business cash management issues by describing working capital options in six words. This analysis is one of several overviews about business banking problems and commercial loans. As suggested in the analysis below, even when there are substantial difficulties to be expected with most current efforts to obtain working capital, the entire process should be more effective for small business owners when major business financing obstacles are both understood and anticipated.

As the initial observation, “banks are not an effective solution” for almost any small business working capital financing situation. Many banks in every region of the country are routinely reducing or eliminating business lines of credit extended to small businesses. Even though commercial loan activity for banks continues to decline steadily, most bankers have continued to state that they are providing normal levels of business financing. Whether a small business needs a traditional working capital loan or a merchant cash advance based upon credit card processing activity, the commercial lender willing to provide the funding is increasingly unlikely to be a bank. In fact, it has become common to hear phrases such as “thinking outside the bank” and “business loans without banks” precisely because bank financing for small businesses has become so hard to obtain.

Community West Bank Expands into Paso Robles

“After our loan production office opens in June, we will file an application for a full-service banking branch office to open in Paso Robles next year,” said Bill Filippin, executive vice president and CBO of Community West Bank.

“The banking landscape is changing, with fewer community banks and larger banks closing offices, he said.

More than ever, there is a need for flexible business financing and decision making that locally owned and managed Community West Bank provides,” he said.

Community West Bank opened a full-service branch office in San Luis Obispo in November 2016. In January, the bank relocated its Santa Maria branch office and opened a new branch office in Oxnard.

For more information, visit www.CommunityWestBank.com.

— Martin E. Plourd for Community West Bank.

Choice of genuine loan lender is crucial in small business financing.

Some companies deal in a line of credit or operating loan. This is usually attached to your main chequing account and can be used to pay operational expenses, when there is not enough money in the business bank account. This type of financing is ideal when there are ebbs and flows in a business’ cash flow or one is looking for small business financing. It can allow you to continue operating normally, when you are waiting on payment from clients or during a temporary slowdown in revenues.

CFPB Issues Request for Information on the Small Business Lending Market

On May 10, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a request for information on small business lending. In a press release accompanying the request, the CFPB stated that its goal is to “learn more about how small businesses engage with financial institutions, with a particular focus on women-owned and minority-owned small business,” in order to help “implement [its] data collection rule.” The small business data collection rule, mandated by Section 1071 of the Dodd-Frank Act but not yet proposed by the CFPB, will impose reporting requirements on financial institutions for information concerning “credit applications made by women-owned, minority-owned, and small businesses.” The CFPB has previously clarified that “financial institutions’ obligations under [S]ection 1701 do not go into effect until the Bureau issues necessary implementing regulations.”

The request for information does not come as a surprise, given the CFPB’s indication in its Fifth Annual Fair Lending Report (which we discussed last month) that it will increase its focus on small business lending. In a speech at the Small Business Lending Field Hearing held on May 10, CFPB Director Richard Cordray emphasized that “business opportunity — especially opportunities for small businesses — often hinges on the availability of financing.”

In the request for information, the CFPB acknowledged that it is in the “early stages” of implementing a small business data collection rule that is designed to “fill existing gaps in the general understanding of the small business lending environment” and identify “potential fair lending concerns regarding small businesses.” The CFPB further stated its belief that the rule should cover “an extensive share of the market and contain enough flexibility to analyze different market segments.” At the same time, the CFPB expressed interest in “exploring potential ways to implement [the rule] in a balanced manner” that would minimize burden to both industry and the CFPB.

The request for information focuses on five key categories: defining small business, data points targeted by the data collection rule, financial institutions that lend to businesses, access to credit, and privacy. The following summarizes the CFPB’s questions in each category:

o Small business definition: The CFPB’s questions center on the challenges faced by applicants when small businesses are defined using specific size regulations, as well as definitions the industry currently uses. The CFPB indicated that it is exploring an alternative to the industry-specific size standards used by the Small Business Administration that would not rely on North American Industry Classification System (“NAICS”) codes.

o Data points: The second category of questions focuses on the data points that should be collected under the rule. These questions also focus on the standards financial institutions currently use to describe, collect, and record data on small business financing, how financial institutions maintain this information in the ordinary course of business, and how they use this data to inform their application processes. In particular, the CFPB asks whether the rule should require the collection of any additional data not specifically mandated by the statute.

o Exemptions: The third category of questions asks whether any classes of financial institutions should be exempt from the data collection rule and what role brokers, marketplaces, and dealers play in the small business lending application process.

o Access to Credit and Product Offerings: The fourth category focuses on the types of credit products currently offered to small businesses and the application process. The CFPB also included questions suggesting that the CFPB is considering whether to apply the rule to the preapproval, prequalification, and account review stages.

o Privacy: The final category addresses the potential privacy concerns implicated by public release of any of the data collected pursuant to the data collection rule and how the CFPB can mitigate such concerns.

Responses to the request for information will be due 60 days from the request’s publication in the Federal Register.

In addition to the request for information, the CFPB simultaneously released a white paper outlining the “key dimensions of the small business lending landscape.” The paper highlights the role that small, women- and minority-owned businesses play in the broader economy, but acknowledges that defining this market is a complex endeavor. In addition, the paper emphasizes the importance of the availability of credit to small business growth. Based on available data, the paper estimates that there are 27.6 million small businesses in the United States. The paper further estimates that term loans and lines of credit occupy the largest market share of financing products available to small businesses (36%), with supplier financing and business credit cards accounting for 21% and 16% of the market share respectively. The paper hints that, at a minimum, lines of credit, term loans, and business credit cards will be among the business credit products covered by the rule, while supplier financing, such as trade credit, might be excluded. The CFPB used the paper as an opportunity to highlight what it views as the importance of the data collection rule in providing information that can be used to identify the needs of women- or minority-owned small businesses and enforce fair lending laws.

Hot Stock Update: On Deck Capital, Inc. (ONDK)

On Deck Capital, Inc. (ONDK) currently has a consensus Price Target of $5.59. While some analysts have a High Price target for the stock of $6 and a Low Price Target of $5.

Several sell side analysts reviewed their recommendations on On Deck Capital, Inc. (ONDK) where 3 analyst have rated the stock as Strong Buy, 0 analysts said it’s a Buy, 14 rated the stock as Hold, 0 analysts reported Underperform and 0 analysts gave their recommendations as Sell. (Current Month Yahoo Finance Ratings)

Zacks Investment Research also rated the stock with a value of 2.38. This scale runs from 1 to 5 where 1 represents Strong Buy and 5 represents Sell.

In the last Quarter, On Deck Capital, Inc. (ONDK) reported its Actual EPS of $-0.11/share. The analysts offering Earnings Estimates for the company were believing that On Deck Capital, Inc. (ONDK) could bring EPS of $-0.1/share. The difference between Actual EPS and Estimated EPS was -0.01 Percent. Thus the company showed an Earnings Surprise of -10 Percent.

On Deck Capital, Inc. (ONDK) has a market capitalization of 292.24 Million. The stock traded with the volume of 1.37 Million shares in the last trading session. The stock touched its high share price of $6.46 on 09/06/16 and the stock also touched its Lowest price in the last 52-weeks of trading on 11/09/16 as $3.64. The company has a 1 Year high price target of $5.31. The stock is currently trading with a distance of 20-Day Simple Moving Average (SMA20) of -11.68%. The Moving Average SMA50 is -14.4% while SMA200 is -19.73%.

On Deck Capital, Inc. (ONDK) is currently showing its ROA (Return on Assets) of -8.7%. The Return on Investment (ROI) is at -8.4% while it’s Return on Equity (ROE) value stands at -28.4%. The stock currently shows its YTD (Year to Date) performance of -12.31 percent while its Weekly performance value is -13.25%. The Monthly and Yearly performances are -8.14 percent and -17.31 percent respectively. The Relative Volume value measured for On Deck Capital, Inc. (ONDK) is 2.6. The Average Volume (3 months) is 527.87 Million.

The stock currently has its Annual Dividend of $0 and an annual Dividend Yield of 0 Percent. ONDK has P/E (Price to Earnings ttm) value of 0, Forward P/E of 16.44, P/C (Price to cash per share) of 3.68 and Price to Free Cash Flow (P/FCF) value of 2.29. The stock is showing its Operating Margin of -29.2 percent.

Company Profile:

On Deck Capital, Inc. is an on-line platform that uses a big data, analytic model to source, underwrite, and fund loans to small businesses. The Company offers online tools and resources including data aggregation and electronic payment technology, and to evaluate the health of small businesses. It’s small business loans include dental loans, restaurant loans, medical financing, restaurant financing, fast small business loans, fast small business financing, online small business loans, online applications for small business loans, small business loans online, retail capital, fast small business financing, short-term business loans, business equipment financing, small business equipment financing and merchant cash advance. On Deck Capital Inc. is based in United States.

Alternative Business Financing Methods Gaining in Popularity

The growing economy and the increase in purchasing power are providing perfect opportunities for new and existing businesses to grow. There are more businesses established in various industries than there were last year, signaling steady growth. Existing businesses are also expanding to new markets and boosting their production capacity.

Naturally, there are challenges associated with starting a new business or expanding an existing one. According to recent reports, finding a reliable source of financing is still considered the biggest challenge of them all. Fortunately, there are more alternative financing options on the market too and businesses are turning to these solutions more frequently.

Project-Based Financing

One of the most popular financing options available for businesses is project-based financing. Instead of taking out a long-term loan with annual interest, some businesses now prefer short-term loans. There are a number of reasons why short-term, project-based loans are more popular today.

For starters, short-term loans are more manageable. The cost of using this financing option is calculated based on the duration of the loan. This means businesses know exactly how much they have to repay even before taking out the loan.

These short-term loans are also very flexible. Businesses can now use a suitable loan for as little as 3 months, eliminating the need for long-term loans entirely in some cases. The maximum principal amount is also relatively high, up to $250,000 depending on several factors.

To make it even better, finding a suitable short-term loan is easier than ever thanks to online resource centers such as Fundera. Fundera grants access to a wide variety of loans designed for businesses. Business can simply define a specific set of search parameters and get quotes from multiple lenders – and different types of loans – in just a few seconds.

Crowdfunding and Invoice Financing

Crowdfunding is another type of financing that is commonly used by businesses today. The immense popularity of crowdfunding has made it a go-to solution for startups trying to take ideas into tangible products. It is also easier to find sources of crowdfunding and connect with stakeholders directly thanks to platforms such as Kickstarter.

Crowdfunding is a great financing option for new and exciting products. As long as the business can generate enough buzz around the product or campaign they are launching, hitting the crowdfunding target should not be a problem. For expansions, dealing with increase in demand and other purposes, however, invoice financing is the better solution.

As the name suggests, invoice financing is the type of financing that uses an upcoming invoice as collateral. The loan amount can be as high as 80% of the billed amount. In most cases, invoice financing can help small and medium businesses deal with large orders and increase their production capacity with little to no extra risk.

A Growing Market

The availability of more financing options for businesses means the current market growth is more sustainable than ever. Experts believe that we will continue to see an average growth of 5%, with some industries enjoying even faster growth that the rest.

We will also see a huge increase in the use of internet marketing and online commerce fueling this growth. Small and local businesses can now reach customers from different parts of the country – and even from other countries – and gain an even bigger increase in demand for their products.

All of these positive signs remain strong despite the recent changes and minor market uncertainties brought by the current administration. If you are thinking about expanding your business or starting a new company, there is no shortage of opportunities to grab in today’s economy. You also have the financing options to support expansions at a much lower rate.