The world of Commercial Loan advice has matured greatly in the last 5 to 10 years, with an influx of new lenders operating in this market space. As a result of this development the nature of the products and terms available in a Commercial Loan has also evolved.

Where once a facility would have been for a maximum of 5 years to 65% LVR and with rigid controls put in place by the lender onto the client, we are now offering 20 year loan terms to 80% LVR’s with set and forget type conditions from a range of lenders.

Together with our preferred lending partners we have an array of solutions to suit almost every commercial lending requirement be it Retail, Office or Industrial.
Our solutions stretch from non specialised simple commercial loans to development finance to highly specialised securities that many lenders will not consider.

Commercial Finance is generally more complex than residential lending and as such often requires specialist understanding to ensure that your finance strategy can keep up with your acquisition strategy, your CFC broker will work with you throughout the transaction process to ensure a successful outcome.

To find out how CFC can assist you, please contact us via the details below:

Consolidated Finance Corporation Pty Ltd
Phone: 1300 855 322
Fax: (02) 9687 8763
Email: enquiries@cfconline.com.au
Address: Suite 4 - 83 George Street,
Parramatta NSW 2150

Why Banks Say No
For borrowers who have experienced rejection of their applications or are concerned about a future rejection, this article describes five major reasons for disapprovals. For each of these five reasons, a strategy is provided for converting the declined loan into an approved one.

This article highlights the five primary reasons that banks decline applications. The reasons provided below do not represent obscure issues, so it is likely that two or three of the reasons described will be important for typical situations. The first two reasons (business plans and tax returns) will potentially impact all commercial borrowers. Many agents will start their loan review process by stating some variation of "Can you show me your business plan?" and "We will need to see several years of tax returns."

Projects are frequently too unique for traditional banks. In these situations (even if a borrower has favourable tax returns and an adequate business plan), it is not unusual for borrowers to be declined by a traditional lender. Borrowers are likely to be confused when they are turned down and will be unsure as to why it happened and what to do next. For each of the five major reasons that a bank might decline a loan, a practical strategy is provided for converting the declined commercial loan into an approved one.

REASON # 1 FOR REJECTIONS

A bank's loan officer or loan underwriter is not satisfied that the business plan provided by the borrower supports the request.

STRATEGY # 1

Most borrowers will benefit directly from dealing with a lender that does not require a business plan due to the following major benefits:

(1) Reduce costs by thousands of dollars. A common range for an average business plan (prepared to typical bank specifications) is $5,000 to $10,000.

(2) Reduce closing time by several months. Business plans can be prepared before or after applying for it, but either way the net extra time required will probably be 1-2 months or more.

(3) If the lender does not require a business plan, there is one less item standing between the borrower and their approval.

REASON # 2 FOR REJECTIONS

Loan underwriters find something on a tax return that disqualifies a borrower under the bank's lending guidelines. This "something" will frequently be insufficient net income, but when loan underwriters look at tax returns, there are many other possibilities which produce a similar result.

STRATEGY # 2

Business loan borrowers will never have Reason Number 2 to worry about if they are applying for a Low Doc loan. Very few traditional banks use Low Doc (no tax returns, no income verification) for loans. Borrowers should seek out lenders using Low Doc. However, this strategy will not work for all commercial loans since there is a maximum loan amount of $2-3 million for most Low Doc commercial mortgage loan programmes.

REASON # 3 

The bank does not generally make business loans for the type of business involved or imposes special requirements that make the loan impractical for the borrower. Fewer banks are making loans to restaurant properties. Similarly, auto service businesses are frequently given unnecessary environmental reporting requirements. There are many "special purpose" properties such as funeral homes, campgrounds and churches.  Most traditional banks will not include these in their business lending portfolio.

STRATEGY # 3

For most business borrowers that can get approved at a traditional bank, there are prudent options available elsewhere. "Prudent options" are clearly available only elsewhere when the bank won't make the business loan in the first place! There are very capable lenders that are interested in special purpose properties.

REASON # 4

When a business is refinancing their current mortgage and wants to get a significant amount of cash out for various uses, it is not unusual for the bank to restrict what the funds are used for and to limit the amount of cash to amounts as small as $100,000. Even though the bank might lend, if they won't provide the amount of cash needed by the commercial borrower.  This is equivalent to declining the loan.

STRATEGY # 4

As mentioned in Strategy Number 3, there are other options available elsewhere! Use a commercial real estate lender that will allow yo to get much larger amounts of unrestricted cash out of a refinancing.  Also it would be better without restrictions on what you do with it.

REASON # 5

The bank will not provide loans without adequate collateral, usually in the form of a lien on personal assets such as the borrower's home.

STRATEGY # 5

Mortgage borrowers should seek out lenders that do not "cross collateralize" assets as a condition for obtaining loans. This will provide greater flexibility for the borrower and avoid unnecessary (and unwise) connections between personal and business assets.

Why would you bother with These Loans? These are some of the applications:

Business, Auto, Bad Credit, Car, Bankruptcy, Business Debt, Business Financing, Debt, Mortgage


These are some of the other types of Commercial Loans:

Secured, Short Term, Small Business Financing, and Unsecured Loans