Golf Course Commercial Loans - By: Allan Michael Taylor

Among the most problematic commercial finance situations for business borrowers is specialized commercial real estate. Substantial challenges for commercial refinancing and acquisitions are typical for golf course business loans.

Because fewer lenders are currently offering competitive business finance terms, this is a further obstacle for an already difficult golf course business loan environment. There has recently been a noticeable shrinkage in regional and local banks which offer commercial mortgage programs for golf course loans. Unfortunately this difficulty can also be seen with other specialized property financing including funeral home loans.

Borrowers should anticipate that the few active local and regional banks will probably offer short term commercial financing instead of a long term golf course business loan. The maximum percentage of value for business financing is a key finance term that can differ from one lender to another. Particularly with commercial mortgage terms for percentage of value and length of loan, it is of critical importance to avoid undesirable business loan terms when refinancing or buying a golf course.

There are some serious potential problems found with golf course mortgage loans that are not usually apparent in other commercial mortgages. When the primary goal is business refinancing for golf course financing, it is likely to be more complicated than the original business financing for purchase. The commercial property loan valuation is usually much less than the overall business valuation for a golf course business loan. The potential for significantly reduced business financing will often occur because of this disparity which causes many lenders to provide a business loan that includes only the commercial mortgage loan value.

Business owners should be prepared for reasonable business financing fees during the beginning of the business loan process for golf course 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 golf course. Commercial borrowers should be aware that charging excessive early fees of $25,000 and higher is a common tactic.

As already noted, the availability of suitable lenders for this specialized type of business loan is shrinking. A prudent choice involving the lender will be a prime factor in securing viable commercial financing for golf course mortgages. It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier.

The use of a business loan expert should be helpful to anticipate potential problems with complex business financing. Since golf course business loans are among the more difficult business finance transactions that a commercial borrower is likely to encounter, the use of preliminary business consulting should be helpful in obtaining better terms and avoiding serious problems.

About the Author

Stephen Bush provides commercial mortgage loans and working capital management. Steve specializes in small business loans and working capital loans.

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