Commercial Mortgage Disapprovals – Five Major Reasons for Rejections
Commercial mortgages are among the most popular things that an entrepreneur should be aware about. Since a business is always entangled with a lot of risks, a need for money may arise at any instant. Hence you will need to borrow money from somewhere at reasonable interest rates. And there are certain important things to keep in mind while taking such loans. Also there are numerous reasons which can cause the disapproval of your loan proposal. And some are discussed below:
The officer may not be satisfied with your strategy:
The official at the bank will ask for your plan for repaying the loan and if he or she is not convinced with the strategy, then there is a great possibility that the proposal will get rejected. The best remedy is to make sure that you consult an expert before submitting the loan proposal. The expert will be able to point out any problems with your business plan.
The tax statements can cause many problems:
There are chances that the official finds some problem with your tax statements. This problem may not be a huge one but still if it is something that is against the bank’s guidelines, then getting the loan would be difficult.
The different special qualities:
There are businesses that require certain special qualities. For example, the automobile industry will need a number of environmental safety certificates. Most of the financial institutions will be reluctant to grant loans to you if the proposed business is such a one that needs numerous special quality certificates. This again can be cleared by consulting an expert.
The bank will limit addition on existing loans:
There may be needs that will cause you to apply for an upgrade for an existing loan. In fact most banks will not provide the entire amount at the same time. Normally a bank will only provide a maximum of $100000 at a time.
If the value of the asset that you plan to mortgage is not adequate then certainly the loan will be declined.