by ARTIS COMMERCIAL CAPITAL | Apr 25, 2023 | Blog
Hard money loans are ideal for repairs, down payment, and other investment costs. A hard money loan is usually a short-term loan with a repayment period of up to 12 months, where the borrower uses a property as collateral. Real estate investors who aren’t comfortable with spending a substantial amount of money upfront to buy real estate can seek a hard money loan for the investment.
How a Hard Money Loan Works
A hard money loan utilizes a property as collateral instead of the borrower’s financial profile and credit. The loan is usually based on the property’s value and has a repayment period of less than a year. These loans are ideal for those who wish to purchase, remodel, and offload homes quickly. Some hard money loans get structured as interest-only loans followed by an extensive balloon payment.
Property Types Ideal for Hard Money Loans
Borrowers can secure a hard money loan on any property ranging from single-family residential, commercial land, multi-family residential, and industrial. Some hard money lenders specialize in a specific property type, such as residential, and can only do land loans if they have experience in the area. Most lenders specialize in one particular niche of loans to minimize the risks associated with defaulting.
Borrower Requirements
Hard money lenders assess a borrower’s equity in the property used as collateral. Most lenders are less concerned with the credit rating of the borrower. Issues on the borrower’s record, including short sale and foreclosure, may need to be addressed, especially if the borrower has adequate capital to cater to the interest on the loan. Most lenders also consider the borrower’s aim for the property. The borrower should thus present a reasonable proposal showing how the loan will get paid off.
Types of Deals Funded by Hard Money Loans
Hard money loans may only be ideal for some kinds of deals. Traditional bank loans are ideal when purchasing a residence with an excellent income history, good credit, and minimal issues such as foreclosure or short sale. The approach is, however, practical if the borrower has adequate time to navigate the lengthy approval process. Hard money is an ideal source of financing when borrowers need a loan for a short time or when conventional loans aren’t an option. Hard money loans can help purchase land, finance construction projects, and fund fix and flip projects.
Hard money loans offer a short-term solution for real estate projects. Individuals interested in such loans should contact an expert from Artis Commercial Capital to identify the assets they need to use as collateral for this loan.
by ARTIS COMMERCIAL CAPITAL | Apr 18, 2023 | Blog
Small and medium enterprises can benefit more from increased cash access for growth or inventory restocking. Merchant cash advance loans are an excellent solution for businesses with no credit history or collateral to apply for a conventional line of credit or business loan. Here are the advantages of merchant cash advance loans for small and medium businesses.
An Ideal Source of Quick Cash
Small business owners who require cash should seek a merchant cash advance. Most cash advance issuers give business owners the money they need within 48-72 hours. The funding doesn’t require an impressive business or personal credit standing as it focuses more on debit and credit card sales. Business owners with an excellent debit and credit card sales history can apply for the advance to secure fast cash.
It Helps Improve Good Credit History
Lending institutions, including banks, assess credit standing when approving a business loan. However, most startups find it challenging to secure a business loan due to a lack of credit history. Novice retail business owners can secure a merchant cash advance to establish an excellent credit history. Existing retailers with past credit rating checks may seek help from credit report services and secure funds to improve their ratings.
Flexible Payment Terms
The repayment period of a merchant cash advance varies depending on the total sales each month. There’s a high chance of repaying the debt quickly if the business makes high sales consistently. Seasonal retail companies have flexible payment terms when servicing a merchant cash advance as they lend money when needed and pay off the loan quickly.
Lower Risk
The merchant cash advance has a minimal default risk for the client and the bank. This happens because the repayment adjusts depending on the company’s cash flow. Hence, your business pays more interest and takes longer to clear the loan if it experiences poor sales. Formal restructuring is optional as the loan will restructure itself when required.
Sustains Retail Business Investments
A merchant cash advance enables retail businesses to expand their markets, fund their investments, secure inventory, and streamline operations for long-term success. Retail business owners can secure a merchant cash advance to fund an e-commerce website. You can use robotic process automation (RPA) to automate error-prone, time-consuming, and repetitive tasks to optimize productivity, accuracy, and customer satisfaction.
A merchant cash advance enables retail business owners to achieve an excellent cash flow. Contact a financial expert from Artis Commercial Capital to secure funding for the immediate needs of your business, such as equipment procurement and tech investments.
by ARTIS COMMERCIAL CAPITAL | Apr 11, 2023 | Blog
Launching a profitable business can be challenging and complex, especially for first-timers. It calls for proper planning, preparation, determination, and dedication. So, do you have brilliant business ideas you want to actualize but need a directory to know where to start? The following guide provides you with insightful steps to take to start a business and actually earn from it.
Decide on Your Niche
You can venture into many fields depending on your passion, expertise, or available market gaps. Beforehand, conduct market research and decide on your target market group to help you narrow down your long list. Then, settle on the field that best suits your business needs, strengths, and abilities.
Create a Business Plan
When thinking of how to start a business, you must lay a solid foundation by writing a strong business plan. Business plans act as a roadmap for your new venture. It defines your goals, business structure, team management, financing, marketing, product details, and relationship management. Also, it attracts investors and gives clear directions to other collaborators.
Obtain Business Permits and Licenses
Business licenses let entrepreneurs run businesses within government jurisdiction. Therefore, before you start a business, you must apply for the relevant permits regardless of your niche. Also, remember to obtain a tax index number for your business tax obligations.
Look for Business Finances
It’ll be better if you have already saved for this dream. However, if you want to start a business with zero or minimal available finances, reach out for loans. You can borrow from your family, friends, and other financial institutions and pay back once you earn.
Mind Your Marketing Strategies
In a flooded market, you must plan how to outdo your competitors. For instance, if your brand is new, lay down and actualize solid marketing and promotion approaches to reach more prospects. Here, you can increase your business online presence to get thousands of potential customers miles away.
Do you want to take your business ideas to the next level? Artis Commercial Capital has your back. Let us help you with the finances you need to start a business and make your dream come true. Don’t hesitate to call us today for more information on your business financing.
by ARTIS COMMERCIAL CAPITAL | Apr 4, 2023 | Blog
A bridge loan, also known as a swing loan, gap financing, or interim financing, is a loan type that provides prompt cash flow for your personal and business needs. It bridges the financial gap between your current situations by providing the finances you need while you don’t have them available. If you’re considering pursuing one, you must know how they work. Keep reading for more insights on bridge loans.
Do You Qualify for a Bridge Loan?
Lenders check if the borrowers meet their set criteria, which may vary from one lender to another. Typically, most lenders assess your credit score and worthiness, debt-to-income ratio, and other credentials. However, if you want to buy a home, the lender will look at your home equity before approving your bridge loan application. Once the lender defines you’re an ideal bridge loan candidate, you enjoy prompt approval than in traditional loans.
Advantages of Taking a Bridge Loan
All-inclusively, the fundamental advantage of a bridge loan is its flexibility. Further, it’s a short-term financing option. If you meet the lender’s minimum requirements, you can access the funds at any time, wherever. For example, you can use an interim loan to buy a new home before you sell the current one. The funding gives you peace of mind since you don’t have to accumulate vast money for your mortgage purchases.
Bridge loans are also best for small and medium-sized businesses facing financial problems. For example, business owners can venture and focus on various operations with a bridge loan even if they have no significant income source to fund the ventures. With this, they grab every opportunity that comes their way and maximize their revenue generation.
Disadvantages of a Bridge Loan
It’s good to know the bridge loans’ flipside. Although bridge loans provide financial support during the transition, they have high transactional costs and interest rates. Also, they’re risky if the proposed mortgage pricing falls when selling your home.
Bridge loans are an excellent way to access money while you await permanent financing availability. And, while you’re at it, don’t worry about where to get the funds. At Artis Commercial Capital, we deliver as per your personal and business needs. Reach us today, and you’ll be happy you did.
by ARTIS COMMERCIAL CAPITAL | Mar 28, 2023 | Blog
According to the United States Small Business Administration, a microloan is any loan that is less than $50,000. While this amount may seem small, micro-lending financing comes with a variety of benefits for small businesses.
In this article, we’ll take a closer look at this loan option including how it works as well as its advantages and disadvantages.
Micro-Lending Financing Explained
The structure of micro-lending financing is similar to a typical term loan. The lender will review and approve your application and extend a loan offer with specific terms and conditions. If accepted, you pay the loan back with interest based on the terms of the agreement. Also, like traditional loans, microloans have fees and penalties attached.
This type of lending is different from traditional lending because it involves smaller amounts. Additionally, the micro-lending financing arena is not dominated by traditional financial institutions. Instead, most loans are made through P2P lending platforms. If you receive a microloan through a P2P platform, the funds likely came from several investors.
Advantages and Disadvantages of Micro-Lending Financing
Microloans have advantages and disadvantages, just like traditional financing options.
Advantages
The advantages of microloans are:
Qualification criteria are more lenient
While qualification criteria vary from one lender to another, it’s typically more lenient than traditional loan qualification requirements. You will still likely be asked for personal and business financial information, as well as to provide collateral and a personal guarantee.
However, since the loan amounts are smaller, the value of the collateral can be lower as well. For example, most of the time, the collateral must be 80% of the loan amount- so on a $10,000 loan, your collateral must be worth $8,000.
Can be used on a variety of expenses
Microloans can be used on a variety of things, including:
- Supplies
- Equipment
- Working capital
- Inventory
- Materials
However, it’s important to note that lenders may put restrictions on how you can use the funds, so check with them before accepting the loan offer.
Lender Options
Micro-lending financing is not available through all lenders, but there are plenty of options:
- Traditional financial institutions
- Alternative lenders
- Non-profits
- P2P lending platforms
- Government entities
Each lender has its own advantages and disadvantages, but the variety of lender options is one of the advantages of micro-lending financing.
Disadvantages
The disadvantages of microloans are as follows:
Smaller loan amounts
One of the major disadvantages of microloans is the size of the loans, which are not enough for many businesses. While the loans can go up to $50,000, a loan this size is hard to secure. In fact, borrowers can only obtain more than $20,000 if they are unable to obtain credit elsewhere and they are likely to succeed. If you need more funds, it may be better to seek traditional financing.
Higher Interest Rates
The interest rates on microloans are not always higher, unless the borrower has a bad credit score. In fact, even top-rated borrowers will pay at least 6% and risky borrowers will pay up to 31.9%.
Not available in all areas
While it is increasing in popularity, micro-lending financing is not available on the mainstream market yet. You may have a difficult time finding microlenders in some areas.
Will Micro-Lending Financing Help Your Business?
If you need a small amount of funding, microlending may help. However, you may want to weigh your options because some of the alternatives may be better. If you’ve done your research and still believe that microlending will help, contact Artis Commercial Capital to learn more.
