A commercial mortgage for buying a business involving a funeral home or golf course is usually a difficult business loan to arrange. Funeral home financing and golf course financing involve problems not found in most commercial loan situations. Refinancing for both of these business categories is likely to be more complicated than the original business financing for 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.

Business Financing to Buy a Business Opportunity

A commercial loan variation in which commercial property is not purchased involves a business loan to buy a business opportunity. The commercial property in this situation is commonly leased instead of purchased. Like business financing to buy a funeral home or golf course, it is usually difficult to obtain dependable commercial financing to buy a business opportunity.

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

Some regional and local banks will probably offer short-term business financing instead of a long-term business loan for golf course financing and funeral home financing. Another key term that can vary significantly is the percentage of value for the business financing. When buying or refinancing a funeral home or golf course business, it is of critical importance to avoid undesirable commercial loan terms, especially commercial mortgage conditions involving length of loan and percentage of value.

Stated Income Business Loan Problems

The use of a stated income business loan is not recommended for a golf course loan or a funeral home loan. One key limitation is the low percentage of value for stated income business financing involving funeral home financing and golf course financing. Another critical limitation of a stated income commercial loan is the maximum commercial mortgage loan that will be approved.

Business Loan Difficulties - Commercial Mortgage Loan Value and Business Value

Another complicating factor for funeral home financing and golf course financing is that the business value frequently exceeds the commercial real estate value by a significant amount. This is especially true when appraising a funeral home. Some commercial lenders will provide a commercial mortgage that includes only the commercial property value, and this will result in a much smaller commercial loan.

Excessive Commercial Mortgage Fees for Golf Course and Funeral Home Financing

There are business lenders that are taking advantage of the limited commercial mortgage loan choices for refinancing, purchasing and building golf courses or funeral homes. Business borrowers for funeral homes and golf courses should not be concerned by reasonable and legitimate business loan fees during the early business financing process. One of the unnecessary and unacceptable lending tactics involves excessive fees (generally more than $20,000) even if the commercial loan is not successfully completed.

Funeral Home Financing and Golf Course Financing - Avoid Problem Lenders

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.