How 100 Financing Commercial Loan Works
If you are considering setting up a permanent home for your business, but you don’t want to spend a lot of money to finance such a move, consider the 100 financing commercial loan. Unlike standard loans and business mortgages, a 100 financing commercial loan doesn’t require down payment. Therefore, there is no need to pay a considerable amount of money upfront. You can take advantage of this, especially if your business is just a startup, or if you want to retain your liquid assets.
How the loan works
Whether the commercial loan if for business or residential purposes, it is always secured. This means you will have to use your asset or property as collateral, and an assurance that you will pay the loan. If you default in payment or miss to repay the loan, the lender can possess your asset and auction it to get their money back.
For a commercial loan, the security is usually the property that the credit is taken for. Furthermore, some lenders may ask for extra collateral in the form of other assets or property before they approve your loan application.
If you are seeking for the commercial loan to set up a business, your construction company or the lender will always need you to present a business plan which lending advisers will analyze and evaluate before they decide to give you the money.
Reasons for considering the loan:
l The best thing about this commercial loan is the fact that you do not need to pay down payment, or any form of deposit on your property. There are hundreds of reasons why a business would be willing to pay higher interest in return for such a loan.
l You may not have the money to pay for deposit, but have the asset to act as security
l Even when you take the loan, you will still have your assets to help you build your business
l Your liquid assets can accrue interest instead of spending it.
l You retain some amount of your cash asset for speculative purposes
l The interest rate on repayment may be offset against taxes
l This loan allows you to trade higher monthly payments and higher interest rate to hold your liquid cash longer.
l The primary disadvantage of this type of loan is the high interest on the loan.
l Because you are not paying any deposit for the purchase of your property, you will get a loan for more cash. This means your interest will be extremely high, and because you are taking more cash, your monthly repayments will be higher as compared to the regular loans, in the same period.
l Banks and other financial institutions usually charge a higher fee on this type of commercial mortgage loan, because they are very risky for the lender
Therefore, this only means you will have to pay a lot more per month for you to be able to pay your loan on time, and before your business start to make some profit.