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Commercial lenders will insist on a business plan that is convincing. They will also look to the documentation provided by your past business and at times even personal tax returns. This practice has been customary within commercial for many years. Historically, these documents were not likely closely examined, but merely checked to ensure their completeness. Today you can expect the documentation in support of your application to be placed under a microscope, and closely scrutinized for even the slightest hint of errors or problems. You can sufficiently prove past cash flow with a documented history of earnings, as demonstrated via previous tax returns.

Being able to show that you’ve filed and paid your taxes is just the start of the process you’re facing. Today an unproven or even slightly risky business venture is unlikely to get approval from commercial mortgage officers. You will be asked to explain and back up every piece of your action plan. Effective communication of your business aspirations coupled with a positive attitude as to the likelihood of your success will do wonders toward persuading your loan officer to view your venture in a favorable light. One thing that is vital is that you form a good bond with your loan officer, especially during these challenging economic times. The services of a qualified financial advisor with exceptional interpersonal skills can work miracles for you.

Some commercial mortgage lenders may insist on placing an additional lien on your private home apart from the lien placed on your business through the commercial mortgage. This is a tricky situation. Can you truly blame the lender for wanting to secure payment by any means necessary? If you trade a lien on your home for the money and your business doesn’t improve, you chance leaving your family out in the cold. This course of action should be undertaken with extreme caution.