Increase Working Capital for Commercial Real Estate
Did you know that you can utilize the complex and amazing resource that is commercial real estate to increase your working capital? If you find yourself with little short-term assets to leverage and you need of capital for another venture, you can utilize long-term assets like your equity in commercial real estate. Here is some key information to know if you are considering this process.
What
Lenders are less likely to provide financing for smaller businesses in this day and age. However, if you have any equity in commercial real estate, you can obtain a loan using this asset as collateral. Essentially, this is to an asset based loan. The loan provided by the financier then allows you and your business the cash injection that you so direly needed.
How
There are actually quite a few lending options when it comes to this creative loan idea. One way to obtain financing is to approach a private lender. The very essence of the private lender is that they are taking on risk loaning you cash, but they get to structure the loan and take risks that traditional lenders simply would not. They can be difficult to find so you may have to work connections to make contact with an entity like this. Another option would be to go to a bank. This is conventional, but has more rules and regulations than the private lender would have. Another good choice would be to get in contact with the Small Business Administration. This government organization was created to help people with small to medium sized businesses get and stay on their feet. They have programs that allow you to obtain an asset based loan with really favorable interest rates.
When
In truth, you do not necessarily need to exhaust all loan options before trying to use your real estate assets to find more working capital for your business. However, there are plenty of other lower risk opportunities for obtaining loans, so this may be the a good idea to save for a time when you truly need it. It is the best option to try when you have little to no other financing options left.
Before you make any decisions you need to research and figure out the best option for your business. If obtaining a loan utilizing your commercial real estate equity is the best option, then you should reach out to someone who can better help you navigate this complex process so you can get the working capital that you need.
