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