Funeral Home Financing

Among the most difficult small business finance situations for commercial borrowers are specialized commercial properties. Substantial challenges for commercial refinancing and acquisitions are typical for funeral home mortgages.

Because fewer lenders are currently offering competitive business finance terms, this is a further obstacle for an already difficult funeral home business loan environment. There are now noticeably fewer local and regional banks offering funeral home mortgages. Other specialized property financing such as golf course business loans is also experiencing similar difficulties.

Borrowers should anticipate that the few active local and regional banks will probably offer short term commercial financing instead of a long term funeral home business loan. Another key term that can vary significantly is the percentage of value for the commercial financing. When buying or refinancing a funeral home, it is of critical importance to avoid undesirable commercial loan terms, especially commercial mortgage loan conditions involving length of loan and percentage of value.

There are some serious potential problems found with funeral home mortgage loans that are not usually apparent in other commercial mortgages. When funeral home financing primarily entails business refinancing, business owners should expect that it will probably be more complex than acquisition business financing, especially in the current lending environment. The commercial real estate loan value is often less than the business value for funeral home business loans. This disparity can result in reduced business financing because many lenders will offer a commercial loan that includes only the commercial property loan value.

Business owners should be prepared for reasonable business financing fees during the beginning of the business loan process for funeral home financing. There are a number of business lenders that have chosen to take advantage of the shortage of commercial loan choices for building, purchasing and refinancing a funeral home. Charging initial excessive fees of $30,000 and higher is a common tactic by some questionable lenders.

As already noted, the availability of suitable lenders for this specialized type of business loan is shrinking. Prudent choice of a lender will be a prime factor in securing a viable funeral home mortgage. While it is not an easy task, business owners must insist on a lender with the ability to successfully complete the complex business loan process and simultaneously avoid key commercial mortgage obstacles.

The use of a small business finance consulting expert should be conducive to a better understanding of difficulties to anticipate in a complex commercial loan situation. Preliminary business consulting should be considered in any serious efforts to avoid serious problems and obtain better terms since funeral home business loans are among the most complicated business financing situations.

The process of refinancing business loans and working capital loans has become more critical to small businesses which are trying to deal with reduced sales and cash flow. In some cases commercial borrowers are attempting to secure additional cash, and in other situations they are being forced to refinance an existing loan by the current lender. With both short-term commercial funding and long-term commercial real estate loans, refinancing difficulties are currently occurring. There are some business finance circumstances that will be harder to refinance. There are three scenarios that are particularly difficult to refinance:

(1) SBA loans
(2) Refinancing of existing commercial credit lines
(3) Business opportunity financing (without commercial real estate)

Whatever the specific financing situation for a small business, commercial borrowers should approach the process with a realization that there might not be the usual obvious solutions for refinancing commercial loans and working capital financing. In order to successfully refinance commercial debt, many business owners will need to consider both new commercial financing programs and new commercial lending sources.