Among the most difficult small business finance situations for commercial borrowers are specialized commercial properties. A particularly challenging set of circumstances both for initial purchases and refinancing is common 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 has recently been a noticeable shrinkage in regional and local banks which offer commercial mortgage programs for funeral home loans. Other specialized property financing such as golf course loans is also experiencing similar difficulties.

Business owners should be ready for the possibility that the small number of active regional and local banks will probably offer short term financing instead of long term financing for funeral home loans. The percentage of value for the commercial financing is a critical finance issue that can vary significantly. Particularly with business loan terms for length of loan and percentage of value, it is critical for borrowers to avoid unrealistic commercial mortgage terms for funeral home refinancing or acquisition.

There are several problems found in funeral home mortgages that are not typically seen in other commercial loans. When the primary goal is business refinancing for funeral home 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 funeral home business loan. The problem with this disparity is that many business lenders will provide a business loan that includes only the commercial mortgage loan value, and this will produce significantly reduced business financing.

For funeral home financing, there should be reasonable commercial financing fees during the early stages of the business loan process. Several lenders have used the shortage of reduced options for funeral home refinancing, building and acquisition to take advantage of commercial borrowers needing this specialized help. Charging initial excessive fees of $30,000 and higher is a common tactic by some questionable lenders.

For this specialized business loan category, availability of adequate lenders has shrunk. A viable commercial mortgage for funeral home mortgages will depend upon a prudent choice involving the lender. 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 small business finance consulting expert should be conducive to a better understanding of difficulties to anticipate in a complex commercial loan situation. Since funeral home business loans are among the more difficult commercial financing situations 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.