3 Keys To Commercial Real Estate Financing For Small Businesses

There are a ton of items that go into getting a commercial real estate loan approved for a small business. Complicated items from valuations to debt ratios. But, most of those items take care of themselves if you focus on and manage just three key important criteria in ensuring that your business gets the commercial property it needs to grow and prosper.So, if we ignore some of the obvious underwriting issues in commercial lending like your credit history, property use or even if the property will be used by your business (owner-occupied) or for your business (rental property) – the three following things are what really matters in getting your loan approved:3 Keys To A Commercial Property Loan1) Price – Price matters. It matters a lot. It matters in terms of what you can afford, what you can buy, where you can buy and the loan that you can get approve.Most borrowers looking to buy property for their small business tend to start looking at what they need and then try to find property that meets all those needs. Which is OK if your resources are limitless. However, most small businesses do not have unlimited wealth and tend to find themselves with more needs from their potential real estate then the wherewithal to satisfy those needs – meaning that most cannot afford to buy property that meets 100% of their company’s needs. Thus, they will have to settle at some point.On the other side, we say that even before you think about your specific needs and what you have to settle on, you should first think about price. And, your price is determined not by what you think you can afford but what a lender thinks you can afford and what they will loan against.And further, you can determine what loan amount you can qualify for and eventually what price of property you can purchase by simply looking at your past revenues.All lenders will take your anticipated loan payment and compare it against your past revenue numbers. If your business could have covered the loan payments over say the last three, four, five or more years (in the past), then it is reasonable (in their eyes) that your business will be able to do so going forward.Thus, let’s say that your business earned in past revenue $5,000 per month (money that your business has left over to cover loan payments) for the last three years.So, would $5,000 per month cover a $1 million loan? No, in fact, a $1 million loan at 6% for 15 years on commercial property would result in a monthly payment of around $8,500.For $5,000 a month, your small business could afford a commercial loan of around $600,000.Now, with this amount in mind – knowing what you can afford – you can then start looking for property that begins to meet your business’s needs and work your way up based on your price. This is much better than looking for property that might meet all your needs then have to come down off that high to meet your price.In order to find what your particular business can afford – its price – look at your past cash flow to determine what your monthly payment could be then use an online payment calculator to either back into your maximum purchase price based on relevant rates and terms or use what if scenarios to get to your price point.2) Down Payment – Now that you have your purchase price, you also need to understand the major expenses a commercial loan will cost you. Not only will you have to pay your closing costs – costs for appraisals, reports, taxes and insurance – but, you will be required to put at least (at the minimum) 20% of the value of the property down as a an equity payment.The good news here is that you can use this 20% that you have to put down to increase your purchase price as the lender will only fund 80% of that property value. Thus, if you can afford a $600,000 loan and your lender will fund that amount – and that amount is only 80% of the value of the property – then you can increase your price by the 20% you have to put down anyways. Thus, while you can afford a $600,000 loan, your total purchase price could increase to $750,000.The bad news is that not only will you have to pay anywhere from 1% to 5% of your loan amount in closing costs – in our example some $6,000 up to $30,000 – but you will also have to come up with a down payment of $150,000 (in our example) – and this amount can not be financed, not with this deal or from any other source.Even if you kept your purchase price at $600,000, you still would have to come up with $120,000 as a down payment leaving your loan amount at $480,000.Many small businesses miss out on buying real estate for their companies (especially in great value markets like we have now) because they do not have and cannot get the required money down. But, 20% down is the minimum these days and very few lenders (if any) will make an exception to it.3) Loan Term – The loan term you get – or that you fight for – can be the difference in both getting your loan approved as well as in the amount of interest your loan will cost you.The longer the loan term, the more affordable the loan payments as the loan’s principal is spread out over a longer period. And, a more affordable (smaller) payment means that you have a better chance of getting your loan request approved.Example: A $600,000 loan at 6% would have a payment of around $5,000 per month. Increase that term to say 20 years, and the payment drops to around $4,300 per month. Thus, your business could either have a much lower monthly payment or would be able to increase the price of the property it intends to purchase. Thus, the power of the loan’s term.However, on the other hand, there is always a cost. In this case it is the cost of interest. The longer the loan’s term, the more interest you will pay on the loan overall.Example: A $600,000 loan at 6% for the shorter term of 15 years would result in $311,000 interest for the life of the loan. That same loan at 20 years (5 more years of payments), its overall interest would rise to $432,000 – a difference of $121,000 just in interest. Quite the difference!Thus, you have to set your term – fight for the term you want – to find a balance between what you can afford and the amount of interest that loan will cost your business because no matter how much your business pays in interest, the business still has to make up for that amount in either revenue or cost savings. If it doesn’t make up for that amount, it will lose money and that is not what you are in business to do.ConclusionThis is a great market for small businesses to buy commercial property. Not only are interest rates low – some of the lowest in our history – but property values on commercial property have not yet begun to rise back to their pre-recession levels. And, there is, no matter how many properties foreigners are buying these days, an adequate supply of both land and buildings available – even in your own backyard.The only real problem in this market is getting a commercial real estate loan for that purchase – tougher than it was just five years ago. However, if you can keep these three keys to commercial property in mind, you should be able to easily take advantage of this beneficial market and get the property your business needs to grow and prosper. And, with these key items taken care of before you walk into your lenders office, all those other issues will just fall into place – as these key items are what really matters to all commercial lenders.Think about it this way. Would it be better to continue to pay your landlord thousands of dollars a month that only goes to build his wealth or to put those funds (your money) to work buying a building that could be worth hundreds of thousands of dollars to you once paid off – not to mention the benefits you get for your business by owning and operating your own building.

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10 Survival Tips for Small Business Owners

The reality for many small business owners is that they were forced into starting something of their own. Perhaps they were retrenched, fired or unable to find a job.What this means is that often small business owners really haven’t even had time to obtain some training in basic small business practices such as finance, human resources management and marketing.The other real danger is that the small business owner works so hard in the business, trying to push for more sales, handling negotiations with suppliers, making month-end payroll and trying to get big customers to pay on time that they don’t catch major problems in their business before they become a threat to their businesses survival.Newspaper reports recently indicated that about 4,000 businesses went insolvent in 2013. The causes for these business failures were not reported on but it doesn’t take a rocket scientist to figure the usual fatal mistakes: bad business decisions, running out of cash, a market that has dried up or even an employee when employees who have embezzled the company.Here are 10 practical survival tips for small business owners:1. Stay inside your “circle of competence”: the investor Warren Buffett avoids making investments outside his “circle of competence”. Starting something new, venturing into a new market requires competence that the existing small business owner may not have. Stick to the knitting in bad times.2. Keep focused on cash flow: When the cash dries up, the game is over. In hard economic times its important to monitor cash flow more frequently, if not daily. Set up a simple system and watch your cash like a hawk. Big customers want to take ever forever to pay and suppliers want their money now. This makes it vital to manage cash carefully.3. Don’t sign sureties: when cash runs out, the temptation is to go to the bank to increase your overdraft. Don’t sign sureties that for a small loan require confiscation of all your business and personal assets. Enough said.4. Temptation: Act ethically at all times: even what may seem harmless will become a major issue if it involves and an unethical business practice. Ensure you have a clear red line where you will not cross over. In this economy with people desperate, unethical, explotative small business are on the rise. Detect them early and avoid them at all costs. Some are not paying their taxes, operating illegally and not complying with health regulations and should be shut down by the relevant authorities.5. Take time to work on your business: Working in your business gives you very little time to work on your business. Make time each week to review where your business is going and how you can improve your operations and increase your market.6. Insurance cover: Have insurance cover in place for fire, theft and personal liability: It sounds like a no-brainer but how many small business owners have adequate insurance? Don’t be wiped out because of this.7. Business advice: The biggest risk that a business often faces is poor business advice. Airlines and utilities are virtually bankrupt because of bad business decisions and have to be bailed out. Double check business advice and rely on your own common sense and savvy.8. Avoid the dangerous number 1: there is a danger in having one big customer or one key supplier. Check your business for this kind of risk and make backup plans.9. Keep a watchful eye out for unusual employee behaviour: One of your employees could be handling too many critical tasks, employees could be taking out stock without you knowing it and finance or bookkeeping employees could be involved in an invoicing scam. Watch out for suspicious behaviour.10. Be frugal: keep costs down and avoid unnecessary purchase of new assets. Set your small business a cost reduction percentage target and stick to it.These 10 tips for small business survival are just a few that any small business owner should keep in mind during these economic times.If you are in any way concerned that there could be un-seen or hidden risks in your business, get in the right professionals or a business adviser before it’s too late.You may be grudge them a professional fee but when you consider it is really a pittance compared to the cost of closing your doors.

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Geography And Globes Toys: Great Aid For Teachers

With the global changes happening in the world of education these days, there are really a lot of circumstances that might affect the world of teaching and learning. With the increase demand in teaching and learning aids, the use of Geography and globes toys rises into action. These learning aids are not only great for students for they can really learn the topic of whatever subject being presented but also for teachers who are really dedicated to serve and to educate the young. These kinds of toys really aid teachers in making their lessons easy to be understood and direct to what is intended to be learned.Teachers are actually drawn closer towards learning of their students and teachers themselves are not enough in making those kids learn. Thus, these Geography and globes toys are made real in order to meet the increase demands for the learning aids and since Geography as a subject tends to be confusing when authentic presentations of data do not exist, teachers should be aware of that teaching do not simply rely on written visual aids or to lesson plans but also to objects that would represent the real ones such as globes and maps.A globe is a very essential teaching aid that would reveal various details concerning the shape of the earthy, the places, locations, time, etc. A globe is not just a display that would complete the look of the room but it is actually a teaching and learning tool that would serve great importance to both teachers and students. A teacher can use a globe to discuss a certain topic in geography, for instance, the different continents that shape the earth. The subject geography and globes toys are all relevant to any teacher for through these aids, teaching can be done smoothly with less hassles.You will never understand how useful these geography and globes toys are for teachers unless you are called to be one. You can actually ask a teacher to help you out in making your mind clear or you can search information by yourself about these teaching and learning aids.If you want to know more about geography and globes toys, you can read other related articles that would contain necessary information or you can refer to educational books for good. Read as mush resources as possible and try to eliminate unnecessary information so you can make things easy for you.

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A Guide to Help You Pick the Best Air Purifier for Your Loved Ones

Holidays are around the corner. This is the time of year when people start purchasing gifts for their loved ones. If you are going to purchase an air purifier for someone you love, we have some helpful tips for you. If you want to purchase the best unit, you may be able to use this guide to your advantage. Read on to find out more.

1: Set Your Budget

Just like anything you purchase, make sure you have set your budget first. The price of the unit will vary based on a lot of factors, such as the capacity, filter type, features, and brand of the unit. If you don’t have a flexible budget, we suggest that you go for a product that is available to purchase for less than $300.

2: Consider the Needs of the Recipient

Your next move is to consider the needs of your recipient. If you are going to purchase this unit for everyday use, we suggest that you go for a unit that comes with a HEPA filter. On the other hand, if your loved one has a specific need, we suggest that you consider a specialized unit.

For example, if they are more prone to respiratory issues, such as allergies and infections, we suggest that you get a UV purifier for them. The devices are designed to neutralize viruses and bacteria.

3: Think About the Available Space

Another primary factor is to consider the available space in the office or house of the recipient. For example, if they need a general-purpose unit for a small apartment, you may want to consider a filterless unit.

On the other hand, if they have plenty of free space, you may consider a bigger unit that features a higher airflow rating. These units are powerful enough to cover a large face.

4: Consider Extra Features

Lastly, we suggest that you consider additional features that they will just love. For example, some units come with an indicator that turns on when the filter needs to be replaced. This will allow the user to change the filter so that the device continues to work properly.

So, you may want to consider these features before you place your order. These features may not be important to you, but your friend may just be over the moon.

Long story short, we suggest that you consider these four tips if you are going to purchase a gift for your loved one on these holidays. Since the air is full of pollution during winter days, nothing can make a better gift than an air purifier. Therefore, you should consider these tips before looking for an online or physical store to make your purchase decision.

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Things to Consider When Hiring a Professional Backlink Building Company

Backlink building is a cornerstone of search engine optimisation or SEO. It is an integral part of the search marketing mix and includes the practice of link baiting, paid link advertising, social media marketing and blog & press relations. With numerous companies providing backlink building services, it can be a daunting task to choose the right one for your company. Given below are some of the things to consider when hiring a backlink building service provider.

# Diversity in Linking

When looking for a professional backlink building company, ensure that they are not putting all of their eggs in one basket. You will come across some services specialising online in directory listing whilst others who are specifically focusing on blogs. There are also other professional services buying links every month and some others practising reciprocal linking. You must collaborate with a company who can offer you a bit of everything. Diversity in linking will make sure that you get the desired results.

# Responsive

The company you choose must be responsive to your needs. You must make sure that you are able to reach the backlink builder whenever you have a question. Responsiveness and exceptional customer service are some of the key decision-making points that you must consider. You would not want to enter into a contract with a company that is not available to answer your questions or clear your doubts. Also, it will be better to work with an agency who can be reached, via multiple channels like, email, call and so on.

The company must also be responsive when it comes to answering specific questions regarding the strategies that they will be using. If the company is unwilling to divulge details of the techniques that they will be implementing, it is best to look for some other backlink building company.

# Reputation and Connection

The reputation of the link building company is important. You must find about the connections and network of the link builder to be able to leverage them to your advantage. Good backlink building companies usually have a long history of connections and success stories. If the company has been a part of the industry for a long time, you can benefit from their experience. In case they have a questionable background, it would be wise to move to the next company on your list.

# Testimonials

In order to be sure that the backlink building company is capable of catering to your demands and expectations, you can ask for reviews and testimonials from their previous clients. The reviews will give you a fair idea about how the company has handled past projects and if they have knowledge in your specific line of work or related industry.

# Pricing

When selecting a backlink building company, price must not be your first criteria, but it should certainly be considered. You would not want to hire a company that drains the finances of your company. However, you must keep your budget flexible. Your decision must be based on the experience, expertise and capabilities of the company. Once all those boxes are checked, you can move to the pricing package that the company is offering. It will be a wise decision to enter into a contract with a company that provides bespoke pricing packages. This is because you might not need the same strategies as needed by some other client of the service provider.

Backlinks continue to be important and they hold a very important place in SEO. you simply cannot ignore backlinks if you are hoping to dominate the online landscape. So, get in touch with a professional backlink building service provider and discuss your specific business needs, objectives and budget. Whilst making your decision, keep in mind the above-mentioned criteria. If you consider the things mentioned above, you will be able to make the right decision and without any hassle or inconvenience.

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