Financing In The Automotive Business

Lenders see as “automotive” properties as a broad category covering car dealerships, service stations, gas stations, tire repair shops, etc. Considering the obvious environmental issues associated with these types of properties, financing is often accompanied by strict approval guidelines. Lenders can make it difficult to overcome these issues when getting financing on an automotive property, but it is not impossible.

The environmental precautions that must be met by automotive properties are clearly recognizable. For instance many automotive business perform painting and body repair tasks that use material that is toxic and must be disposed of properly. A borrower needs to portray to a lender that these potential environmental impacts will be carefully managed and controlled. Traditional lenders often see this as a deterrent and refuse to approve the project simply because they do not understand the risk, or lack there of. It is often easier to get approved with less hassle if a borrower works with a small non-traditional lender. These non-traditional lenders do not see automotive properties as too problematic but rather as noteworthy investments. Furthermore, non-traditional lenders do not require time consuming environmental reports, one’s in which the borrower is responsible for the expenses. These environmental reports are required even if the loan does not get approved.

Although these facts about traditional lenders may seem discouraging, there is hope. Many small brokers helping an automotive property borrower find less burdensome restrictive guidelines. This auto repair lending specialist should be equipped in helping the borrower secure a stated income or full doc asset loan. For example, many lenders will accept the environmentally sensitive property with a mere submission of an environmental questionnaire. It is then submitted to an insurance company of the borrowers choice in order to determine the potential environmental risk, if any. The cost of the insurance premium will be based on the loan amount and property type. This method is beneficial to the borrower because it saves money that would be spent on costly environmental reports. This environmental screening process that non-traditional lenders use allows for more riskier properties to be approved.

It is essential to work with and automotive lending specialist in order to ensure the best rates and terms. Along with ideal loan guidelines, a non-traditional automotive lending specialist can provide borrowers with the easiest approval available. A lender who knows the ropes will be equipped with the experience to handle different hurdles that may arise in the lending process, such as less than perfect appraisal value or mediocre borrower credit history. Also, this expert will help reduce the costs incurred by the environmental aspect of your automotive property venture. Being able to use environmental questionnaires as opposed to environmental reports will save the borrower money as well as up their chances of approval. Furthermore, working with a non-traditional lender will allow for flexibility in approval guidelines. The benefits of working with a non-traditional automotive commercial lending specialist are clear and tend to provide borrowers with a positive confident lending experience. If you have any questions feel free to contact experienced commercial lender Joseph Velez.