When a commercial loan is considered to be non bankable, it is termed to be a commercial hard money loan. In these cases, the business for some reason fails to qualify for the standard banking criteria necessary for a commercial loan, but does have assets or real estate that are enough to collateralize the loan for lenders or investors. Therefore, the financing options are left to private lenders. A borrower to renovate and flip a commercial property often uses these loans.It is usual for the commercial loan to have higher risks, not only to the borrower, but for the lender as well. Therefore, these types of loans are typically more expensive than commercial loans. Interest rates for these types of loans will vary between the different lenders and the amount of risk they are considered to be taking.Finding a commercial lender is not always a simple endeavor. Commercial hard money lenders all have money readily available and disposable. However, if the borrower presents too much of a risk, these private money lenders will also decline their appeals for loans, even though the lenders exist for the purpose of helping people who have been turned down by the banks and have no other financial resources readily available to them.Commercial hard money lenders take a different approach from that of conventional banks. Loans tend to be approved (or rejected) very quickly and less paperwork is required of the borrower. The borrower’s credit history is not always taken into consideration during the loan process. If he or she can convince the lender that the proposal makes sense business-wise, then there is an increased likelihood for approval.Commercial hard money loans can be spent on business expansion and for property developments. They can be used as construction loans, real estate transactions and other ventures that require large sums of money. Although private investors make the lion’s share of hard money loans, commercial lenders and private companies also make them.When a potential borrower approaches a commercial hard money lender for a loan, he or she is given a worksheet that is known as a “Scope of Work.” The borrower fills out this sheet with every last details of why the commercial hard money loan is needed. For example, if someone would like to buy a building and convert it into a coffee shop, the Scope of Work would list each and every repair needed, the length of time expected in which the repair could be affected (including waiting periods for permits) and the cost of each repair or renovation step. If the borrower happens to omit a step in the process, it could prove difficult to get the lender to provide funding for that particular repair.While commercial hard money loans can be difficult to come by and more expensive than bank loans, there is no doubt that lenders who deal in hard money commercial loans find ways to make deals happen.
Like the saying goes, “The only things certain in life are death and taxes.” Unfortunately, small businesses know this saying all too well.Unlike employees who look forward to their refund every April, small businesses loath the approaching spring, knowing they will have to pay Uncle Sam its share of their profits. Each year, small businesses struggling to turn a profit in an increasingly competitive business environment must pay taxes in order to keep their doors open.With dwindling profit margins and tightened lending restrictions, however, many small business owners find themselves between a rock and a hard place when it comes time to pay the tax man. Although a business may have steady sales and revenue or thousands of dollars in inventory, banks and traditional lending institutions simply aren’t handing out small business loans like they were in year’s past, leaving small business owners with few funding options to pay their tax bill.Thankfully, peer-to-peer lending, or social lending, has solved this growing dilemma. These modern social lending marketplaces have connected millions of borrowers with individual investors. Borrowers receive low-interest, fixed-rate loans that can be paid off in two to five years, while investors are able to benefit from decent returns in an economy with sinking bond and savings rates.Thus, it’s a win-win situation for both small business owners in need of immediate funding and investors looking to make a small profit while helping others.From Desperation to Exultation: One Man’s Venture into Peer-to-Peer LendingJohn Mitchell is an Ohio-based small business owner who found himself in such a predicament just last year. As the owner of the only hardware store in a small town, John’s store flourished the first few years it was open.After getting his inventory levels, pricing models, and management just right, he decided to expand his business by opening a second location in a neighboring town. John sunk all of his profits into opening his new store, which meant he was short on funds come tax time. However, knowing the success of his business, he thought he would simply get a small loan from the bank that housed his accounts and provided him with the initial loan he used to launch his business four years earlier.Unfortunately, he witnessed first-hand the effect the recession has had on lending regulations as the banker he’s known for years denied his loan application. If he couldn’t get a loan there, where could he?On the brink of despair, John took to the Internet to research loan options. After digging through forums and trying a few different searches, he ran across peer-to-peer lending. In less than a week after going through the quick and easy application process, he received a personal loan at a low rate for the amount he needed. A week later, John sent a check for the full amount to the IRS, and less than eight months later, he was able to pay off the loan with the profits from his new store!If you are a small business owner who has found yourself in a similar circumstance, peer-to-peer lending can do the same for you as well, but how does peer-to-peer lending work?How Peer-to-Peer Lending WorksA breakthrough product or service emerges every generation, and in the early 2000′s, the emerging breakthrough was social networking. From helping in the organization of overthrowing political regimes to staying in touch with friends and family members, social networking has had a profound effect on our daily lives. Now, it’s changing the small business financing landscape as well.Peer-to-peer lending is a modern social networking solution for small businesses in search of a way of securing alternative funding. The goal of peer-to-peer lending sites, such as Prosper and Lending Club, is simply to connect individual investors with those in need of funding, and these sites are becoming an increasingly useful tool for small business owners who are unable to secure funding from traditional lenders.Rather than jumping through endless hoops only to be denied by a bank, small businesses can receive funding via peer-to-peer lending in no time at all by following three simple steps:Step 1: Create a Profile and Loan ListingThere are a myriad of peer-to-peer lending networks to choose from, so your first step is to research the best ones and create a profile and loan listing on the site you choose. The loan listing is essentially a cost-free ad that indicates the amount of money you need and your desired interest rate.Step 2: Let the Bidding Process BeginAfter your listing goes live, investors have the opportunity to begin bidding on your listing, providing you with the interest rate and loan amount they are willing to offer you. A major advantage of this bidding process is the fact that it can intensify as more and more lenders begin competing for your business.When this happens, interest rates will begin dropping, potentially allowing you to obtain a much lower interest rate than you expected. It’s important to note, however, that your credit score, income, and debt-to-income ratio plays a role in the lending decision process.Step 3: Funding and Paying Back the LoanAnother benefit of borrowing from peer-to-peer lenders is that you can accept several bids to receive your requested loan amount. For instance, if you ask for $10,000 in your loan listing to pay your business taxes, you can acquire the amount from collecting $2,000 from five different borrowers.This makes it much easier for borrowers to receive the money they need. However, instead of making five separate payments, you would only make one payment, because the peer-to-peer lending site is responsible for dispersing the money to lenders until loans are repaid in full. They simply charge a small fee for this service.With increased lending regulations, banks are tightening their purse strings more than ever before, making it much more difficult for small businesses to receive the funding they need to expand their business or even pay their taxes. Thankfully, peer-to-peer lending has proven to be a worthy competitor in the small business lending marketplace. If you are a small business owner and find yourself unable to pay your taxes as April approaches, or backed taxes for that matter, a peer-to-peer loan is an ideal option.
Business phone systems – whether for a small business or for a large corporation – are an essential part of how you communicate with your employees, your customers, potential customers, suppliers and other stakeholders. Business Phones are available in a variety of configurations, off with a long list of standard as well as advanced features.Efficient and affordable telephone communication solutions give your business a competitive edge. There are quite a few factors you will have to consider when evaluating and deciding on the business phone ideally suited to your nature and size of business. Please remember that an efficient business telephone can provide your employees the extra help they need to be more productive.There is no denying that choosing a phone system for your business can be a bit overwhelming because of the technicalities involved when comparing one phone system to another.KSU (Key System Unit) less Systems – These phone systems are indeed the best choice for small businesses having fewer than 10 employees. KSU-less system entail low initial investment as all that you need to purchase are only the phones. A KSU-less system is not permanently wired into your office, which makes it easy to shift to a new location. The one drawback of a KSU-less system is they are not expandable,Key Systems – KSU (key system unit) systems are typically for businesses with 10 to 40 employees. Key systems come with a phone cabinet that houses routing software, and it uses the public switched telephone network (PTSN) or landline system to route calls.PBX (Private Branch Exchange) Systems – These phone systems are better suited for midsize companies with more than 40 employees. PBX systems will give your organization advanced functionality, and are also highly customizable. These are fairly expensive systems and you can purchase the equipment outright and install it at your office. Alternately, you can consider hosted PBX systems where equipment is owned and managed by the provider of the system. This option can drastically cut down system costs while still offering the advanced functionality that most businesses would want from a PBX system.Voice over IP (VoIP) – VoIP phone systems can offer significant cost savings as well as many advanced and useful features. VoIP runs over Internet lines and routes your calls over a data network. VoIP systems come in several different varieties – IP-PBX, hosted VoIP, virtual PBX, and other options. VoIP systems use some combination of internet and landline connections to route calls. The drawback in using VoIP is that you are abjectly dependent on an internet connection to receive and place calls- sometimes you may experience network outages and/or limited bandwidth that can impede your phone services.Telephone systems are no doubt pricey but when you consider the true advantages of an office phone you will better appreciate their cost-effectiveness, an appropriate business phone structure can help your employees do things that were not possible before, and that can improve the way you conduct daily business transactions. This apart, it will also enhance employee productivity. Consult with your local service provider or supplier to ensure that your phone system’s features and capabilities will meet your company’s short- as well as long-term business goals.