Business Loans as a Form of Economic Salvation: Helping the Real Estate Industry

Written by Chad Otar Posted On Tuesday, 25 October 2016 13:21

Without inventory, there is little real estate agents can do. While that point may seem obvious -- indeed, it is obvious -- there must be greater awareness of this fact, since the success of developers and contractors is inseparable from the prosperity of individual agents and brokers. Which is to say, we must ensure that members of one group have, or can get, the necessary capital to finish a housing development, break ground on an apartment complex or renovate an existing series of properties. We need to unite these parties because each one plays a critical role in fulfilling the completion of a project and the consummation of a transaction.

I issue this call to action because, in my role as Managing Partner at Excel Capital Management, I know how important a business loan is to various real estate professionals. Take, for instance, this post about how this help can benefit a construction company that seeks to operate without interruption, while it has several accounts receivable and a temporary shortage of money.

That summary about the many ways a business loan can aid a contractor facing a credit crunch reveals the concrete (and concrete, pun intended) methods available to this individual. For that money can underwrite the cost and maintenance of equipment and machinery, as well as the purchase of materials such as granite and wood, while honoring insurance costs and sustaining payroll for full- or part-time employees. That infusion of capital can keep a contractor afloat, as he has close to $400,000 in accounts receivable, so he can complete nearly $4 million in confirmed projects.

More importantly, that loan is easily accessible: The contractor in question need only submit a few bank statements, a business lease, his driver's license and fulfill some other minimal stipulations.

Now, apply that scenario to any number of real estate developers throughout the United States, and you should arrive at the following conclusion: Without that infusion of cash, too many companies -- many of them in business for years or decades -- would collapse, despite their proven credit worthiness, timely record repayment and reputation for scrupulous accounting.

If real estate agents make this cause their own, and they should do everything to do associate themselves with this campaign, then the industry as a whole will be stronger -- thereby making the case for these loans all the more persuasive. Think of that capital as the lifeblood of the real estate profession, which means it is also the financial salvation of the economy in general. For we cannot have national prosperity with a plunge in housing prices, a halt to new home construction, and tens of millions of unemployed agents, bankers, contractors, subcontractors and developers. We cannot have -- we shall not have -- a real estate market devoid of buyers and sellers.

By making specific lenders champions of residential real estate, we accomplish at least two crucial things. First, we educate professionals about the options they may not know they possess; we show them the opportunities they can seize, which are often the circumstances they would be wise to embrace. And secondly, we enhance the health of a vital portion of the economy -- we may very well be the ones who prevent a downturn or stop the onset of a recession.

Consider this capital a call to arms, so to speak. Treat it as a catalyst for innovation within the real estate industry, in which qualified experts have the resources they need -- and their clients have the features they want -- so everyone can enjoy a robust exchange of goods and services. Those conditions are, after all, the essence of a free and fair market.

With this system in place, real estate agents can thrive; as they should, as they must.

Written By: Chad Otar, Managing Partner of Excel Capital Management

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