Atlas Alternative Finance
Atlas Alternative Finance

International Commercial Loan Blog

Bank Financing versus Alternative Private Lending

When considering commercial real estate financing, there are several choices available. The most traditional option is getting a loan from a bank. Investors may also want to look into alternative forms of financing from other sources, such as Atlas Alternative Finance.  The first step in obtaining financing, however, is some basic research on what is available.  

One challenge in any commercial real estate transaction is risk. Will this investment triple in value in the next 5 years, or is there another real estate bubble about to burst?  This uncertainty can make it difficult to get a loan at a satisfactory interest rate because banks and other lenders may be nervous about the risk of uncertainty. From uncertain markets, economic risk, and increasing regulation, there are many reasons to be cautious.

Banks offer certain advantages for commercial real estate financing. They can frequently offer the lowest mortgage rates on the market. With traditional loan qualification guidelines, their procedures may lower a borrower’s risk of default. They also offer long-term options, which spread the risk out over twenty years or more.

On the other hand, there are some aspects to bank loans that cause some borrowers to look elsewhere. Loan packages typically have a rigid down payment structure with strict income verification and credit score requirements. The approval process can be long and drawn out, lasting as long as three months before the financing is secured. Banks rarely lend on non-conforming product types and if the transaction does not fit perfectly inside the bank’s credit box it can be nearly impossible to secure financing through this route . They also impose high pre-payment fees, making it difficult for borrowers to get out of paying the full value of the loan if they want to sell the property.

 

Funding through alternative lenders can be secured extremely quickly once the parties come to an agreement about the terms. Typically the qualification process is simpler, more efficient, and less expensive. There are a few things to keep in mind, too. Most loans have short terms, and the underlying real estate serves as collateral for the financing. Usually the borrower must show the property’s income potential in order to obtain the loan, which can be challenging.

 

Atlas Alternative Finance has number of funding sources that are not traditional and have the flexibility to structure the deal so it makes sense to all stake holders.   Our specialty is working on transactions that may require creative structuring, in the form of commercial business financing, senior debt financing, mezzanine financing, participating debt, subordinated debt, equity capital, joint ventures, asset-based loan, unique capitalization, or hard money.   Give us a call today to talk about how are funding platforms can help your business.

 

Atlas Alternative Finance
699 Walnut
Suite 400
West Des Moines, IA 50266
515-724-5876 
info@atlasalternativefinance.com

 

 

Disclosures:

We recommend you have an attorney at the time of application and throughout the entire process.   The information on this site should not be considered as legal advice or opinion.  We are not a direct lender.

 

We are not a United States Securities Dealer, Broker or US Investment Advisor.  The purpose of this site is to provide general information.  The information contained herein is intended solely to give a general indication of possible available loans and does not constitute a solicitation to enter into a transaction. Although we pride ourselves on arranging financing for every situation, there are some transactions that are simply not viable enough to fund.

 

We do not send out marketing emails.  If you receive a marketing email containing a name similar to Atlas Alternative Finance from an email address ending in anything other than @atlasalternativefinance.com, it is not from our company and is likely to be a phishing attempt using our name.  We only use emails ending in atlasalternativefinance.com. 

 

 

 

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Atlas Alternative Finance

699 Walnut St
Suite400

 Des Moines, IA 50309

USA
Office 515-724-5876 Email
info@atlasalternativefinance.com

News & Events

Due to business expansion Atlas Alternative Finance will be moving to a more spacious location located in downtown Des Moines beginning April 2nd 2018.    

****CAUTION****

November 16, 2017

We do not send out marketing emails.  If you receive a marketing email containing a name similar to Atlas Alternative Finance from an email address ending in anything other than @atlasalternativefinance.com, it is not from our company and is likely to be a phishing attempt using our name.  We only use emails ending in atlasalternativefinance.com.  

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