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 Â
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.
by ARTIS COMMERCIAL CAPITAL | Mar 21, 2023 | Blog
A hard money loan is a real estate investor’s best friend because it is the quickest way to secure a deal. However, it can get complicated, so it’s important to understand the advantages and disadvantages before accepting this type of loan.
In this article, we’ll explain more about what a hard money loan is, the advantages and disadvantages, and when you should use this type of loan.
Hard Money Lending Defined
A hard money loan is a short-term loan obtained through alternative lenders. When compared with traditional loans, hard money lenders often have lenient criteria but stricter terms. Borrowers often turn to this type of funding after a mortgage or other loan application has been denied or to avoid the process of obtaining a loan through traditional means.
Advantages and Disadvantages of Hard Money Lending
Hard money lenders represent one of the best sources of capital for real estate investors. However, there are also a few disadvantages to keep in mind. Below, we will explore both of these facets of hard money loans to help you decide if this type of funding fits your needs:
Advantages
There are several advantages of working with hard money lenders, including:
Speed of funding
The Dodd-Frank Act set regulations on mortgage lending, meaning that investors need lots of time to close a loan, often several months. However, hard money loans can be secured within days or weeks, depending on the negotiations.
Flexible terms
Since you are dealing directly with an investor instead of with a traditional bank, terms can be negotiated.
Collateral
Typically, the property that is being purchased acts as the collateral for the loan. In some cases, hard money lenders will accept other assets such as a residential property in your name or a retirement account.
No “Red Tape”
Many times, getting a traditional loan for an investment property is difficult. Traditional lenders consider certain credentials, including credit score, LTV ratio, DTI ratio, and other factors. The primary factor that hard money lenders are concerned with is the value of the property.
Convenient
When working with a traditional lender, you must provide tax returns, leases, proof of income, bank statements, and more. On the other hand, hard money loans avoid all this hassle.
Potentially fund multiple deals
Traditional loans only allow funding for one deal at a time. Hard money lenders, on the other hand, allow investors to use other people’s money which means more than one deal can be funded at once.
Beat the competition
There are two things that a seller wants: cash and a timely transaction. A hard money loan provides both- which can help you beat the competition.
Disadvantages
When considering whether or not to work with hard money lenders for your real estate transaction, there are also some disadvantages to consider:
Cost
The convenience of a hard money loan comes at a cost. Since the lenders are at a higher risk, the interest rate is often up to 10 percentage points higher than traditional loans, ranging from 10% to 15%. Other fees, such as origination fees and closing costs are also higher.
Shorter repayment schedule
The repayment schedule for a hard money loan is typically between 6 and 18 months, which is much shorter than a traditional loan. Therefore, it’s important to sell the property and make a profit as quickly as possible.
When Should You Use Hard Money for Real Estate Investment
While hard money lenders will issue loans for nearly any type of real estate, there are certain properties that are ideal for this type of funding. One of the most common hard money loan deals is house flipping. This type of project typically moves quickly which means investors don’t have time to wait for a traditional loan.
Do You Need a Hard Money Loan?
If you are a real estate investor looking to secure a deal quickly, you might want to consider a hard money loan. Contact Artis Commercial Capital to learn more about how this type of funding can help you.
by ARTIS COMMERCIAL CAPITAL | Mar 14, 2023 | Blog
Banks and traditional lending institutions are constrained by governing bodies to observe certain guidelines when approving loans, and these guidelines tend to cause a high rate of disapproval. Even if your application is approved, it may take as much as two months before you actually have the money in hand. By that time, your small business could have drowned because your cash flow has dried up and choked off the lifeblood of your business. To have the best chance of being approved for a bank loan, here are some of the bank business loan requirements you’ll be expected to fulfill.
Bank business loan requirements
Here are some of the bank business loan requirements you’ll be expected to provide when applying for a bank loan. Missing any of these, or submitting documents that are inaccurate or incomplete may be grounds for automatic disapproval.
Business plan – not all banks require this, but it shows how sound your business is and how well-thought-out your path to the future is
Credit – it will be best if your credit score is 660 or above
Cash flow – if you can demonstrate positive cash flow, it will show that your business is fundamentally sound
Collateral – if you have some kind of collateral to offer, your chances of approval will increase
Industry – banks like to know the specific industry you’re in, and what your position is within that industry
Age of your business – it helps a bank to know how long you’ve been operating because that shows stability and success within the field
Documentation – you’ll be expected to provide all kinds of documentation for your bank business loan requirements: tax returns for previous three years, employer identification number, proof of collateral, income statement, balance sheets, personal financial statements, and a copy of the commercial lease on your property.
Our expectations
When you work with Artis Commercial Capital, you won’t have to supply all the same documentation that a bank expects from you. We’d like you to have good credit history, but we can probably still work with you if yours is less than perfect. Contact us today about your business loan, and find out how much easier it will be to meet our expectations than it would be if you worked with a bank.
by ARTIS COMMERCIAL CAPITAL | Mar 7, 2023 | Blog
Many entrepreneurs are lured into the area of house-flipping because of the potential to earn huge profits and to accumulate wealth in a relatively short period of time. It’s true that a great deal of money can be made by flipping houses, but you should be aware that there are some pitfalls commonly experienced by newcomers to the business, and even veterans sometimes fall prey to these same mistakes.
Mistakes made by house-flippers
Here are some of the most common mistakes made by people in the house-flipping business. Being aware of these pitfalls is no guarantee that you’ll be able to avoid them, so be very wary of the presence of any of these deal-breakers:
Not enough money – there are a number of different financing options available when house-flipping, but there are also a number of hidden costs that suddenly appear and can scuttle deals. For instance, repair work, interest rates, property-holding costs, and renovation costs.
Not enough time – it can take quite a bit of time to locate properties suitable for flipping. Then it can take more time to carry out any needed repair work or remodeling, and it will take more time to have the house inspected.
Inadequate skills – if you had hoped to do much of the repair work yourself, you may be hampered by the fact that you lack certain professional skills necessary for the job. Lacking those skills, you’ll be obliged to pay for them, and that will increase your expenditures while lowering profits.
Insufficient knowledge – once you’ve become good at flipping houses, you’ll be aware of all the subtleties and nuances associated with the business. Until then, you may lack the knowledge to pick the right property, at the most favorable location, and for the best possible price.
Need cash for flipping houses?
If so, we might be able to supply the funding you need. Contact us at Artis Commercial Capital, and our financial experts will discuss some possibilities with you so you can secure the funding you need to carry on your house-flipping enterprise.
by ARTIS COMMERCIAL CAPITAL | Feb 28, 2023 | Blog
Economic downturns have the potential to cripple or even destroy businesses. The key to survival for your company is advance preparation. Here are some strategies that can assist your business in being prepared for a recession.
Recognize the Signs
Identifying the warning signs will assist you in being prepared for a recession. According to the National Bureau of Economic Research, recessions are characterized by significant long-term economic downturns. During these periods, there is less demand for products and services. Economic uncertainty causes consumers to be wary of spending. Companies may receive fewer orders than usual. This often causes businesses to implement cost-cutting measures such as closing locations, reducing productivity, and letting go of workers.
Keep Your Workforce Flexible
During recessions, workforces become more volatile. Some workers may make greater efforts to prevent the possibility of being laid off, while others may search for openings for better-paying jobs. Companies that maintain a flexible workforce have a distinct advantage in being prepared for a recession. To complement their core full-time employees, they hire extra temporary staff from online personnel apps according to the needs of specific projects. These workers are already trained and ready to go. While you temporarily employ them you have the chance to observe their efficacy in the positions in case you want to hire full-time help again when the recession ends.
Take Advantage of Opportunities
If you have prepared for a recession by building up a cash reserve, you will be in a position to benefit from certain opportunities that economic downturns present. For instance, you may be able to hire talented employees that other companies have been forced to let go. Suppliers may offer you better prices for goods that you need. If your competitors experience difficulties or even fold, you have a chance to take over some of their market shares or even acquire their companies.
For more advice on being prepared for the recession, get in touch with Artis Commercial Capital.
by ARTIS COMMERCIAL CAPITAL | Feb 21, 2023 | Blog
Most small businesses eventually come to a point where it becomes necessary to secure additional funding in order to keep the business running smoothly and generating profits. Getting the funding from a bank is always more difficult than obtaining needed funding from an alternative lender, since alternative lenders are not subject to the federal guidelines that traditional lending institutions are. In order to improve your chances of getting a bank loan, there are some things you can do. It still may not be possible to get the funding you need, but taking these steps will give you the best opportunity.
Securing a small business bank loan
The first step you can take toward securing a bank loan will be to ensure that you have excellent credit. That means you’ll have to establish a history of paying your vendors and suppliers promptly, and you cannot have defaulted on any previous loans. If your credit history is good, then you’ll need to find out exactly what your candidate bank requires in the way of documentation when applying for a loan. Have a solid business plan ready to show your banker, because this will demonstrate that you’ve done market research, you know the competition well, and you have a good grasp of the financial flow you expect from your business.
Then you’ll need to choose the right kind of small business bank loan for the funding you need, and this should be a loan type that fits your circumstances. You should be able to demonstrate to the bank that you’ll be able to maintain positive cash flow while repaying the loan back for the number of years agreed to in the term length of the loan. The better prepared you are for all contingencies, the more likely it is that you’ll be approved for the small business bank loan. However, sometimes even the best candidates get turned away by most banks, and in that case you’ll still have the option of working with an alternative lender.
No luck securing a small business bank loan?
It isn’t surprising, since the majority of applicants are disapproved these days by conventional lenders and banks. However, alternative lenders like Artis Commercial Capital are not obliged to follow the same stringent guidelines as banks, so we have higher approval rates. Contact us today to see if we can help you secure the funding you need for your small business.
