Today there are different financial sources available which provides funds to various small and medium scale companies. These funds are available according to specific circumstances in different packages. There are commercial loans available which provide financial assistance to Small size business and also provide counseling opportunities to the people to enable them to take proper regarding finance. Thus the customer can avail the financial counseling and determine the best way to get the finance. Thus commercial loans offer reliable help to the people.
There are different companies now coming forward in providing small and large scale loans depending upon the financial status of the borrower. There are many important factors to be analyzed before the lender grants the amount of loan to any borrower.
The first major feature to be analyzed is to clearly understand the financial status of the person interested in borrowing the sum. Loan shall be granted only if the financial position of the borrower is stable. It is also necessary to ensure that the investment shall be repaid timely according to the agreement between the two parties involved.
Apart from that before lending the required sum of money, the lender of such money would also require the borrower to provide assurance that he would be able to repay the entire amount of loan in time which is decided mutually between the parties at the time the agreement takes place. To regulate the sanction of the loan, it is necessary for the borrower to give an evidence of the fact that he has considerable individual investment of his own in the business, based on which the lender would grant the required sum of loan to the borrower. It is of utmost importance for the borrower to give proof of his investment as no lender would be willing to grant loan in its absence.
Existence of collateral is the second major feature to be kept in view in order to obtain the agreement. Collateral must be both in the nature of personal as well as business in order to obtain commercial loans for small sized business. It would be much easier for the borrower to obtain the commercial loan if he has larger amount of collateral for obtaining the loan. However if the borrower is not having must collateral to be offered, then in order to obtain the sum of loan he has to endow himself with a guarantor. If a person wants to get his loan to be accepted easily, then he should provide with a co-signer who can provide with appreciable collateral on his behalf.
Now days these commercial loans are available on line also, helping the people to utilize effectively their scarce time and hence making it easy to access the lenders who readily provide with valuable information and application to obtain the commercial loans.
Processing of Commercial Loans
Most of the time people are quite anxious while applying for a commercial loan as they have no knowledge about various processes through which the applications filed has to undergo. But once a person becomes aware of the entire processes involved, it becomes easier to get it approved and also helps you to be patient. The financial capacity of the borrower of such commercial loans is properly assessed with the view to decide as to which plan should be offered to the borrower according to his requirement and financial status and whether to grant the loan or not. The lenders also inquire into the debt status of the borrower which is very important decision affecting the lending decisions f the companies. After the above decisions are taken, loan applications are filled up to be submitted.
Once the officer receives the loan application from the borrowers, various factors are required to be examined by the officers before accepting the application. He will evaluate the credit report of the individual, the income status and the amount of collateral available. A number of other documents are also required to be furnished if you apply for real estate commercial loans like region map, label information, asset appraisals. If the borrower applies with the help of the broker, then the task of getting the loan approved is entirely his headache by packaging the entire loan demand of the borrower.
On the receipt of the package of the commercial loan by the decision makers, you would be presented with an intent letter or term sheet from the processor. It is to be ensured that one the formal document, all parties is on one page. Terms like parities involved security type, financing amount may be included on the term sheet. Around a week may be taken deciding on your package during which some information and documentation may have to be provided from time to time. In case of involvement of a broker while applying for a loan negotiations have to be made by him on fees and the best terms. After completion of all formalities including an approved application form, next is to choose an offer which is most attractive and thus the final letter of intent being signed and returned along a check, if it is needed, to make a deposit and also so that the reports of third party are paid which includes appraisals.
Once the report of the third parties is lucratively accomplished, the ultimate package is finally deposited again to the loan committee for the finishing sanction. No mistakes should be committed at this stage for getting the loan to be successfully approved. On the approval of the loan, the concluding documents are received by the If your loan is closing agent approved, your closing agent, who is perhaps a legal representative, representative of escrow company or may also be a title company. Such a closing representative records and organizes the title deed transfer; insurance cover is also arranged by him, synchronizes the trade transactions and also organizes the documents to be signed by you. Such a closing may happen during the approval period or at the time of underwriting. At the time of closing, the loan amount is financed by the lender through cashier’s check or may be through drafts and also through electric cable transfers.