Commercial Lenders – How To Find The Best Ones

 

Are you looking for an Auckland corporate finance company that will help you with a project that you have planned to start and complete in the next few months? A commercial lender is a company that will only loan you money based upon what is called hard collateral. In the case of these banks and lending institutions, the hard collateral is in reference to the real estate that you are going to build. However, it could be a much larger project which could be anything from nonconforming assets to different types of factoring, all of which will allow you to get the funding that you need. Here is a basic overview of the different types of commercial lenders that are available, and where you can get the best interest rates on this type of loan.

 

What Exactly Is A Commercial Lender?

 

When you are looking at the many different types of commercial lenders that are available, they can be anything from private lending institutions, mutual companies, commercial banks, financial groups and what are called hard money lenders. All of the companies have different standards and interest rates, allowing the borrower to assess what each company has to offer and make the best choice. The reason that you want to compare what the different companies have to offer is because not all of them have the same financial qualifiers, and are certainly easier to work with data in a traditional bank for a regular home loan. Since everything is based upon hard collateral in most cases, if you have a good reputation for starting and completing projects in the area, you will more than likely get the money that you are looking for, regardless of the you choose to work with.

 

Why Commercial Lending Is So Fast

 

One thing that most people notice when they are doing their first loan with a commercial lender is how quickly they can fund your money and how responsive they are in regard to your needs. Since they are not bound by same regulations that a traditional bank is, it’s actually very easy for them to finance whoever they choose to work with. This has led to many unscrupulous lending companies popping up, all promising to provide the money, but at a extremely high interest rate. It depends on how desperate you are, how much money you need, and what your reputation is in the industry, in regard to who you will inevitably choose to work with that can give you the best rates and prices.

 

Commercial Lender Loan Terms

 

The terms of the loan itself will depend upon the value of the property, if you have a track record per your credit rating, and whether or not a prepayment penalty clause is part of the deal. For instance, most of them will not lend you more than 80% of the assessed value of the actual project, they will usually lend money for five years or 10 years, and could also have a balloon payment at the end. There is sometimes a prepayment penalty clause which means if you get the money right away, they don’t want you to pay off the loan immediately. This means they will be losing all of the interest that they otherwise would have been able to charge you, which is why many of these loans will have this clause. Each business will be able to qualify for different loans, so the more that you are able to apply for, the more likely it is that you will be able to get a very affordable rate from an Auckland corporate finance company that you can trust.

 

Once you are able to compare the different Auckland corporate finance companies out there, and choose one that can give you a low interest rate, without a prepayment penalty clause, you will have found the best company to work with, one that can give you the money that you need for the project that you need to complete, and do so for the most affordable rates available.

 

If you are looking for corporate finance in NZ, try globalpacific.co.nz who help finance many different types of project.