Financing for Real Estate and Business Investing
Business Loans - Funding Types
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"We ran a search for capital on Sunday and had
four funding sources lined up on Monday. Thank you!"
Gary Reed - Lock-N-Stitch Inc.
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Capital Type
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Capital Type Definition
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Account Receivable Factoring
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Account receivable factoring serves as collateral for short term working capital loans that you can obtain fast and cost effectively.
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Asset Based Loan
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Seeking to convert a company assets into working capital. Giving a security in an asset(s) in exchange for cash.
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Bankruptcy/Reorganization
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Financing to reorganize in company in a turnaround. Typically secured by assets; equipment, inventory, A/R, PO's, etc.
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Credit Card Receipt Advances
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Up to a $50,000 advance against regular occurring monthly merchant credit receipts.
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Expansion Financing
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Growth has outpaced existing business. Loan for existing demand. Key here is existing demand, not projected.
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Franchise Financing
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Specialized financing reserved for the franchisees of recognized, typically nationally known, franchises.
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Import and Export
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Loans to promote the shipping or receiving of products or materials. Based on existing market, demand or orders.
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Inventory Loan
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A loan typically made as part of a relationship where the lender will also provide retail financing for the product.
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Purchase Order Financing
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Loans on the written order to purchase goods at a stipulated price with an agreed to delivery date. Credit rating of orderer is key.
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Secured Credit Line
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A pre-arranged amount of credit based upon existing inventory, A/R and PO's.
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Unsecured Credit Line
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Up to $200,000 in business credit based upon credit worthiness.
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Commercial Mortgages - find the funding you need
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"We closed a deal and found two
new brokers in just 15 days!"
Caroline Ogutu - Actrade Capital, Inc.
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Capital Type
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Capital Type Definition
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Acquisition and Development
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Raw land infrastructure development (streets, utilities, etc.)
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Adjustable Commercial Mortgage
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Interest moves with a specific index (Prime, T-Bills, etc.)
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Construction Mini-Perm
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Construction with 3 to 5 year loan, usually on income property.
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Construction Loan with Take-out
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Construction with pre-arranged takeout loan in place.
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Fixed Rate Commercial Mortgage
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Interest Rate remains constant throughout the term.
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Hard Money Loan
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Loans from private lenders based primarily on the hard asset value (commercial building, vacant land, etc.).
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Interim Loan
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A short term (2 yrs or less), bridge or project type loan.
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Joint Venture
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A financial partner in the development of real estate.
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Participating Mortgage
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Lender receives a kicker for gross income above a preset level.
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Real Estate Sale and Leaseback
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Lender purchases land and leases back to borrower (generally developer) for a fixed rent plus other considerations. Mortgages are issued on leasehold at market rates. Usually, produces more dollars than a mortgage.
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Real Estate Purchase Loan
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Lending for the purchase of commercial real estate.
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Second Mortgage (Commercial)
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Loan secured by equity behind that of the first lien.
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Wraparound
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Lender makes a second mortgage and assumes the first mortgage.
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Equipment Leasing – find the funding you need
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"Very Impressive. Your service opened the doors for us to get the money we needed."
Allen Morrell – US Publishing, Inc.
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Capital Type
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Capital Type Definition
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Financing
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Making of a loan using the equipment as collateral. Good operating history, credit rating, debt ratios are the keys.
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Leasing
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Contract for a fixed period of time in exchange for payments, usually in the form of rent for equipment. Typically lower credit requirements.
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Sale and Leaseback
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Sale of an asset for cash, with a contract to lease the asset back from the funding source purchasing the asset. Sales tax an issue here.
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Government loans - funding types
Government Loans from the SBA - Small Business Administration loans can be used for most business purposes.
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"From the day they ran their capital search to the
day it closed for $250,000 was two weeks!"
Doug Hood - Rainmaker Capital Corporation
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Capital Type
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Capital Type Definition
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7A: SBA Loan Guaranty
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Loans to small businesses from private-sector lenders (banks, etc.) which are guaranteed by the SBA. The SBA has no funds for direct lending.
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Certified Development SBA 504
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Loans to small businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. CDCs work with the SBA and private-sector lenders to provide the financing.
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Federal Export Assistance Loans
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Export financing of U.S. goods and services through a variety of loan, guarantee, and insurance programs. (Ex-Im Bank Programs)
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