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Financing for Real Estate and Business Investing

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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.

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.

“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.

“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 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)

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