Business Equity Loans
Business equity loans are mortgages placed on a business's property in exchange for funds. The equity (total value of property and assets) of a business can be a good source of financing for a company in need of cash. Business equity loans are taken out in a percent Loan To Value (LTV) ratio.
A business that has a property value of $500,000 might take out a loan at 80 percent Loan To Value, which would provide the company with $400,000 cash. In exchange, a lien is placed on the property as security of payment. Many lending institutions will take interest-only payments for a predetermined period of time. The borrower should be made aware that during this time, interest compounds each month.
In most cases, a borrower can choose to make principal payments as well during this period of time, but he or she should first make sure that there is no early repayment penalty. Some lending institutions wish to make a certain amount of money on a loan, and therefore will charge borrowers for paying a loan off before enough interest has accrued. This makes early repayment more costly, rather than less so. This is not a terribly common practice, but the borrower is always wise to ask questions.
iBank.com allows the borrower the opportunity to ask those questions and find the lender with a loan package that best benefits them. Registering with iBank.com allows a borrower to communicate with lenders online and find out what kind of interest rates and repayment options they have, in order to make an educated decision on their loans.
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