You may be able to avoid a commercial loan personal guarantee by negotiation, building an excellent corporate credit profile, having a strong business with great cash flows and obtaining referrals of lenders who do not require personal guarantees.

If you are not able to avoid personal responsiblity, the lender will examine your personal wealth, including all your personal assets, debts, tax returns and bank accounts. If you truly believe in your business endeavour the lender will expect you to provide this information and personally guarantee your corporate debt.

If you are overburdened with debt and finding it difficult to manage then it is very natural that you will look for a debt help through which you will be able to reduce your debt burden. Debt Settlement is the only option through which you can reduce the amount of your outstanding debt. Debt settlement helps you to settle your debts for an amount which is lower than what you actually owe. So, debt settlement gives you the opportunity to make some potential savings. These savings through Debt Settlement can be ensured only when you choose a Debt Settlement Company which is perfect for you. In order to choose the right kind of debt settlement company you need to keep in mind certain important points that are discussed below:

Points you should consider while choosing the Debt Settlement Company:

* When you consider different Debt Settlement Companies, give attention to the company profile and the background of each company. Be sure to get information regarding the companies’ accreditations and certifications. You can trust a Debt Settlement Company if it is a Better Business Bureau (BBB) member and a member of TASC (The Association of Settlement Companies)

* Before enrolling into a debt settlement program of a Debt Settlement Company, make sure that the debt settlement service from the start to finish will be provided by the same Debt Settlement Company. Also remember that if the Debt Settlement Company is a reputed and reliable one then all the policies and procedures involved in the debt settlement program will be clearly documented.

* A reliable Debt Settlement Company will always disclose the fees and charges to the customer prior to the commencement of the Debt Settlement Program. So, just be informed about the fees in advance and take the decision after comparing the fees of different Debt Settlement Companies.

* Do not forget to check the client testimonials of the Debt Settlement Companies that you are considering. According to FTC (Federal Trade Commission), every Debt Settlement Company should have a definite process for customer complaint resolution.

* According to FTC, the Debt Settlement Companies should have their own in-house legal department and that legal department should contain considerable experience of the credit industry.

* According to the Federal Trade Commission the Debt Settlement Companies should also provide an in-depth review of the debt settlement program offered by them. Prior to the commencement of the settlement program, the Debt Settlement Companies can also undertake some kind of regulatory assessment.

General eligibility requirements for filing a Chapter 13 for an individual business owner are: (1) the business cannot be incorporate or a partnership; (2) unsecured debt cannot exceed $360,475 and secured debt cannot exceed $1,081,400, these amounts are adjusted periodically; (3) receive credit counseling from an approve counseling agency within 180 days of filing; and (4) there hasn’t been a previous dismissal of a Chapter 13 petition within 180 days of the new filing due to debtor’s willful failure to appear in court, failure to obey court orders, or a voluntay dismissal of the previous petition after a creditor attempt to gain relief from the court on secured property.

In addition to the petition the business owner will have to file schedules that will fully disclose their financial condition such as, schedules disclosing all their assets and liabilities, current income and both business and personal expenses, all contracts to be performed including unexpired leases and a statement of financial affairs. A plan of reorganization will also be required.

Assuming the plan of reorganization is approved by the court, the business owner will have three to five years to complete the plan. For specific details of how a Chapter 13 filing can help a small business owner, the owner should seek the counsel of a bankruptcy attorney.

If a complanint has been filed in court suing the borrower on the remaining balance of the mortgage note including all foreclosure cost, the money lender has initiated a judicial foreclosure. Generally, notice to the borrower of the filed complaint must be served personally, by mail or public notice in a local newspaper. The lender will also record a “lis pendens” against the property with the county recorder for the purpose of notifying prospective purchasers or any other interested party that the property is in litigation.

In most states the borrower has thiry days to file a written response to the complaint. If the borrower fails to answer the complaint a default judgment can be entered against the borrower for the amount of money the lender has requested in the complaint. If the borrower answers the complaint within the time frame set by state law procedures are initiated that allows both the borrower and lender to be heard in court in front of a judge. Assuming the judge finds the debt valid a judgment will be entered in favor of the lender. A written judicial order will be issued authorizing the property to be sold (auctioned off to the highest bidder).

A non-judicial foreclosure is processed without the intervention of the court system. Depending on the state statues where the property is located a Notice of Default or Notice of Sale will be recorded at the county recorder and sent to the property owner. If the owner does not cure the default by bringing the mortgage payments current including the cost of foreclosure the lender can proceed with the sale of the property. State statues setforth the legal timeframe in which a sale can be held, as well as, the notice requirement to both the property owner and the public of the pending sale.

There are basically three types of cap rate calculations related to the potential value of income producing property. If you know two of the three variables you can calculate the third. They are:

1. Purchase price of the property
2. Expected rate of return
3. Net operating income (NOI)
Note: NOI excludes non-cash expenditures such as depreciation for
determining cash flow.

Let’s assume an eight unit apartment building with a sales price of $1,500,000 with net operating income of $120,000.

What is the rate of return on this investment?

$120,000 divided by $1,500,000 = 8% return.

If the investor by chance wanted an 8% return, What should investor be willing to pay for a building with net operating income of $120,000?

$120,000 divided by 8% = $1,500,000 max purchase price.

If you know the market rate of return (8%) and the sales price ($1,500,000), what should be the cash flow generated from the investment?

$1,500,000 multiplied by 8% = $120,000 annual cash flow.

Let’s assume the apartment building only generates $100,000 cash flow annually. What would be the maximum purchase price the investor should be willing to pay?

$100,000 divided by 8% = 1,250,000 max purchase price.

In this example the building would be over priced at $1,500,000 and would not probably be a good investment. The property appraiser utilizes the cap rate as one of their tools in establishing the market value of the property. You as an investor should also understand and apply the capitalization tools in analyzing the potential acquisition of income producing properties

Another factor the borrower should consider are discounts points whether to pay or bypass. A discount point is a fee paid to the lender up-front to lower the interest rate on the loan. This may make sense to the borrower if the mortgage is going to be retained for a long period of time. To determine whether to pay for a reduced interest rate, the amount of money saved over a period of time from a reduced interest rate should be more than the cost of the discount fee paid.

There will be further due diligence by the lender during the process in requiring additional documentation. However, these 5 items will start the process and let you know up front whether the lender is interested.

Qualifying for a hard money loan is not as difficult as you may think. Co-signers are not always required to be on title, no seasoning of credit trade lines are necessarily required, cross-collaterlization is permitted, foreign nationals are okay and if you are unable to fully document your personal income is not a deal killer. However, if your investment is an owner occupied structure you must be able to show the ability to repay the loan.

Many people find the process of purchasing commercial property a challenge. Most investors cannot finance this type of loan from their own pocket. They need some financial backing. This is why you need a commercial loan broker. There are many commercial property loan lenders in the market but they want to lend money only to the right buyers.

Qualifying for this type of loan can be a tough road. You need to submit the necessary documents to the lending company and tax returns will normally be a requirement. These loans can take around 30 to 60 days of processing time.