How to Finance Your Business When You Own a Home

Sooner or later, a business will almost always need a loan. Whether it is used for expanding the business, paying another loan back, purchasing real estate, or any other number of reasons, a hard money loan may be the answer to your business problems.

If you are a business owner, who also owns a home, you are in luck! You may be able to refinance your primary residence for business purposes.

Documents Needed

Though documentation is still needed to qualify for a loan, the process isn’t nearly as grueling as traditional lending. Here is a list of some of the documents that you will be asked to present. Check with your lender for specific requirements, or send me a loan scenario so I can let you know what else you’ll need.

• Loan Application– One on behalf of the company and another on behalf of you as an individual (in case you are asked to personally guaranty the loan)
• Corporate Documents- Operating Agreements, Statements of Information, Corporate Resolutions, ByLaws, etc to establish the authorization of taking out the loan on behalf of the company.
• Personal Credit Report- To get a better idea of what type of borrower you are. This doesn’t necessarily make or a break a deal.
• Cashflow Projections- Your business’ cash flow projections give lenders concrete financial data that they can use to assess the risk.
• Statement of Your Personal Financial Status- A list of your personal assets and debts to give the lender a fuller financial picture that can be a great advantage to you.
• Loan Scenario Information- How much are you looking to borrower, how much is currently owed on the property, what the estimated value of the property is and how long you are looking to borrower money are all important information that will be needed.

Presenting Your Scenario To The Lender

If you look at it from a lender’s perspective, they are going to want to know about your experience and expertise, what collateral you have to offer and how much you’ve already invested into your business.

• What collateral you have – When it comes to hard money, the collateral may be your primary residence, the business locations itself, or any other form of real estate you’d like to borrower equity from.
• How much money you’re personally willing to put into the business – Being willing to risk your own money shows the lender that you’re committed to the enterprise. It would be wise to either write a letter of explanation stating what you’ve already invested into the business, or show it in bank statements/ transactions. Having skin in the game always looks appealing to an investor.
• Your expertise and/or experience in your chosen field – Any potential lender will want to know more about you and your area of expertise, because the success of your business can rely on it. Be prepared to talk about yourself when you speak with a lender. Your background, expertise, and even your aspirations may all work to your advantage.

Conclusion

Hard money loans are an excellent solution to borrowing money for business purposes when you don’t qualify for a bank loan and when credit card interest rates are too high. Not only will you be able to payoff some of that credit card debt, but you will also save on the interest because the rates tend to be lower than those high-yielding cards.

Borrowing against your real estate assets not only rewards you for reaping off of the equity you have earned and deserved, but it also provides the resources needed to grow and expand your business.

Next Steps

Schedule a call with me today to learn how Marquee Funding Group, Inc. can help finance your next business loan. The process is quite simple, all you need to do is pick a date and time that works best, and we’ll get the ball rolling.