To keep a company or business running, you usually need enough inventory to cover your customers’ needs and meet satisfaction. But what happens when you don’t have the funds for the investment or to continue in businesses? Warehouse loans are the usual answer.
When we talk about loans or lines of credit, we usually consider them for acquiring properties, lands, or financing constructions. However, there are several loan options nowadays that can cover different needs depending on what you are aiming for. But in order to access different types of credits, you need to go with the right lender for them.
Most banks, insurances, or similar institutions that are known in history for being lenders, have limitations in the loans they are able to offer. Or they decide to keep it low due to all the conditions and terms they would have to establish for any business or person to apply for them.
In the case of you being a business or manufacturer that needs funds for inventory or other elements and aspects of the company and thus, have the need for a warehouse loan, you cannot rely on most traditional institutions for it. Banks have established many terms, including high credit score and a long story of both personal and commercial finances. This means new businesses or companies that haven’t been operating for too long, usually are unable to apply for warehouse loans.
Private lenders, on the other hand, are more flexible in the types of loans they are able to offer, and this moves onto the requirements and conditions established to apply for them. Our team at Commercial Real Estate Loan Pros of West Palm Beach offers different warehouse loans so you can finance your inventory or general expenses to continue in business. Or to be able to start your company by having enough resources to acquire the goods and covering the processes it takes.
Just as other private lenders, we use the same method of having your goods and inventory items as collateral for the loan. In this case, the collateral isn’t the property but rather the goods you have collected and included in the agreement to apply and get the loan.
For businesses, this credit can be tricky and risky due to how much they can lose in terms of goods, which can be more than the total amount of the loan. However, we have made sure to include terms that benefit you as well, not only us as the lenders.
What you need to know about warehouse loans
Essentially, they are the same as traditional loans used for acquiring properties, either commercial or residential ones. But since it is a credit that takes goods and commodities as collateral in exchange for funds for different purposes, other terms apply. Instead of using a long explanation, let’s dive into an example that will make things clear for you.
Let’s suppose you are a medical device company with several devices in your warehouse or as storage. In short, you have many products for sale. However, you don’t have enough money to continue operating or to cover all the expenses of your company. As a result, you end up being stuck with the devices but unable to sell them, and even if you do, you won’t be able to cover all the expenses you have right now.
Also, you don’t have enough credit score or personal finances to guarantee the repayment of the credit, which leads lenders to not approve the usual loans. But if you take your medical devices and apply for a warehouse loan, you will be able to use them as collateral and obtain the funds required. If you’re unable to repay the credit, your devices—in this example—will be sold by the lender to repay it, but if you repay it according to the terms, you can begin taking possession of your goods.
With that clear, you must know that usually, the goods and commodities you offer as collateral are taken by the lender to a third-party warehouse to have control over them. However, our team at Commercial Real Estate Loan Pros of West Palm Beach doesn’t take it to this extent if you are able to guarantee you won’t dispose of the goods you’re offering as collateral. We can come to an agreement and determine who will keep the inventory or if we can go 50/50 with it.
How do the interest rates work with this credit?
Just the same as any other. Even when you have collateral, you still need to repay the loan based on an interest rate as well. However, due to the nature of the credit, the rates are much lower than usual, especially in our company.
We will stick to rates that are reasonable and fair for both parties. After all, we don’t want you to stop operating when you’re clearly making an effort in applying for this loan. And we don’t want you to rely on unsecured loans or short-term ones that involve more consequences when you’re unable to repay them. Our interest rates go from 1% to 3% most of the time, but since this is an average, you can expect our team to work around your needs and possibilities.
Now, we are more interested in your knowing that it is a great benefit to be able to access this credit compared to many others. Since the repayment schedule can be coordinated with the usage of inventories or materials, you have more freedom with how you can return the money. Also, you’re most likely to get it approved compared to any other type of credit.
Although credit scores are important as well as personal and commercial financial records, the fact of providing collateral improves your credit rating, and even opens your doors to larger loans. Therefore, there’s no reason to not consider this loan compared to others unless you’re aiming to have both your goods and inventory as well as the funds for other aspects. Keep in mind warehouse loans can be used for anything you need and the only difference is the collateral you’re giving and the lower rates you’re able to access.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: