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Buy a Business - Funeral Home and Golf Course Business Loan

By: Stephen Bush A business loan to buy a business involving either golf courses or funeral homes is among the most difficult commercial mortgage scenarios. Golf course financing and funeral home financing involve special complexities not found in typical business financing situations. In both cases refinancing is usually even more difficult than the commercial loan to purchase.

Reduction in Commercial Lenders - Golf Course and Funeral Home Financing

As a further complication for a difficult business loan for a golf course or funeral home, less business lenders are willing to offer competitive business financing terms. There has recently been a noticeable shrinkage in regional and local banks which offer commercial mortgage programs for golf course loans and funeral home loans.

Buy a Business - Business Opportunity Financing

Business financing to buy a business opportunity is a special business loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find.

Golf Course and Funeral Home Loans - Commercial Mortgage Terms to Avoid

When buying or refinancing a golf course or funeral home business, it is important to avoid undesirable business financing terms. These terms include the length of the business loan and the percentage of value for the commercial loan. Some local and regional banks are particularly likely to offer short-term commercial financing instead of a long-term commercial mortgage.

Stated Income Business Financing Difficulties

Although a stated income commercial loan has a certain number of benefits in specific circumstances, the use of stated income business financing is not recommended for a funeral home loan or golf course loan. A major limitation of a stated income commercial mortgage is the maximum business loan possible. A further limitation is the low percentage of value for stated income commercial financing involving either golf course financing or funeral home financing.

When Commercial Real Estate Loan Value is Less Than Business Value

Some commercial lenders will offer a commercial loan that reflects only the commercial real estate value, and this will result in a reduced business loan. For golf course financing and funeral home financing, the business value is often more than the commercial property value. This will almost always occur with funeral home appraisals.

Exorbitant Commercial Loan Fees for Funeral Home and Golf Course Financing

Commercial borrowers should expect some legitimate and reasonable commercial mortgage fees during the initial commercial loan process. There are several commercial lenders that continue to take advantage of the severe lack of business loan choices for purchasing, building and refinancing a golf course or funeral home. One of the particularly unacceptable tactics is to charge exorbitant fees ($25,000 is not unusual) whether or not the business financing is successfully completed.

Lender Choices - Golf Course Financing and Funeral Home Financing

Successful business financing for either a funeral home loan or golf course loan will depend upon an appropriate choice involving the commercial lender. As noted above, the number of viable commercial lenders for this specialized type of commercial mortgage is rapidly shrinking.

The practical reality is that a commercial borrower should be prepared for the limited choices of truly qualified lenders for a business loan to buy a business involving funeral homes or golf courses. It becomes essential to choose a lender with the capability to successfully complete the required commercial loan process and simultaneously avoid the business financing problems described above.

Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.