Commercial Underwriting Guidelines Commercial underwriting entails many factors which basically surround the borrower and the property. But we have included as much detail that surrounds what really goes into a full doc loan, such as a conventional or SBA financing program. Financial Analysis A key component in making an underwriting evaluation is the debt coverage ratio (DCR). The DCR is defined as the monthly debt compared to the net monthly income of the investment property in question. Using a DCR of 1:1.10 a lender is saying that they are looking for a $1.10 in net income for each $1.00 mortgage payment. Typically they will determine the DCR ratio based on monthly figures, the monthly mortgage payment compared to the monthly net income. The higher the DCR ratio is the more conservative the lender. Most lenders will never go below a 1:1 ratio (a dollar of debt payment per dollar of income generated). Anything less then a 1:1 ratio will result in a negative cash flow situation raising the risk of the loan for the lender. DCR's are set by property type and what a lender perceives the risk to be. Today, apartment properties are considered to be the least risky ...
Read More

Running a Business Is More Than Just Sales I know you are probably sick and tired of hearing about the CoronaVirus, but if it did teach us one thing is that we were not prepared for what happened both personally and in business. Many people are finding themselves in financial predicaments trying to make ends meet, they are at risk of being homeless, losing their cars, and hitting the food banks to feed their family. While thousands of small businesses have closed their doors for good, and the owners now are looking to find a way to take care of their family and their future. Of course, it is easy to have 20/20 hindsight or be a Monday morning quarterback, but the simple truth is that the best time to do something is now. What do I mean by doing something? Well, no matter if you need to protect yourself personally or protect your business, or both it's time to get yourself in a situation to handle the next situation. There will be another situation! It’s just a matter of when. No, it doesn’t mean it has to be a virus, it could be an economic collapse, which could affect ...
Read More

Should You Buy or Lease Equipment for Your Business? Just about every business needs equipment to start and grow and at some point, you’ll need to decide what’s best for your business: Should you buy or lease equipment?The answer may clearly be one or the other, although depending on the phase your business is in – startup, early expansion or later-stage growth – and what industry you’re in, as well as your financial capacity, it’s often a mix of both.There are essentially two types of equipment that a business may need. First, there are basics that are needed to set up office and back-of-house operations, such as laptop computers, printers and phones.In addition, there may be larger-cost equipment for specialized services, such as state-of-the-art medical or fitness equipment, or you may need equipment for the production of goods and services. This can include things like landscaping and construction equipment or restaurant and craft-brewery equipment and everything in between, as well equipment to store, transport and ship goods.Here, we look at the pros and cons of buying and leasing, along with some funding options that can help you determine which may be the best option, whether you purchase or lease.Buying equipmentPros:When ...
Read More

Merchant Cash Advance Consolidation Many business owners fall for the multiple loan syndrome or in the merchant cash advance world it is known as stacking. As a small business owner, you feel you have limited options for getting access to capital. Then the phone rings and the person on the other end of the call tells you that your credit doesn’t matter and that they can lend you money based on your daily credit card or cash receipts. Wow, what a great way to get money without the hassle of the bank.  But now that you have gone ahead and obtained funding, it’s like the floodgates opened and everyone and their brother will be calling you, offering you even more money. Wow a feeling of worth overcomes you, and you start having dreams of grandeur, You find out they can stack their loans in 2nd, 3rd….8th position and you are starting to love the color green. You soon find yourself with 3 or more positions and the daily ACH out of your account for payment is putting a strain on the cash flow, which is why you took the money in the first place to help the business cash flow.The one ...
Read More