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Finance Options - Debt and Equity - LIST

"We Consult on ALL these options, and Structure, Prepare then Deliver to the BEST Financial Resources."
(We usually share points and fees with DEBT providers.)  LUCRATIVE REFERRAL PROGRAM.

Some companies start with our COMPLIMENTARY Overview Review

  Sources

  • Conventional Banks
  • Government (SBA, HUD)
  • Community Banks
  • Credit Unions
  • Non-Bank Lenders
  • Alternative Lenders
  • Bridge Lenders
  • Local Family Offices
  • Insurance Companies
  • Pension Funds
  • Incubators
  • Community Collaboratives
  • High-Net-Worth / Private Individuals

Specialties

  • Cash Flow Lenders
  • Equipment Lenders
  • Vehicle Lenders
  • Real Estate Lenders

Types

  • Conventional (65%-90% Loan to Value, LTV - or Cost, LTC)

  • Small Business Administration (SBA - up to 90% LTV or LTC on Commercial Real Estate or general business development; good interest rates).

  • EMERGENCY LOANS and GRANTS available NOW - see Emergency FINANCE Options page for DETAILS

  • Housing and Urban Development / Federal Housing Authority (HUD/FHA insured - multifamily - health care, elderly, special needs - several, complex programs)

  • Second (remaining 10%-35% LTV or LTC; higher interest rate; though most CRE lenders don't like to or are not allowed to take or work with a second position)

  • Using Investment Capital for the 10%-30% loan down payments, optimizes your profit perspective - Contact Us for the most-lucrative solutions

  • Lines of Credit
    • Revolving Seconds on home or assets; higher interest rate than fixed
    • Under $30K; community banks and credit unions; unsecured, no/low documentation; higher interest rate after promo period
    • Under $300K; services available to float one application to several lenders; some focus on those using the same higher credit bureau reducing inquiry hits; about 10% fee from proceeds; higher interest rate after promo period
    • Note: 0%-interest promotional credit cards are available - but may accrue interest - and normally charge double-digit interest on balance after 0% term

  • Participation (discounted equity purchases after completely paid off)

  • Mezzanine (lender can convert to an equity interest in case of default, subordinate to senior lenders; higher interest rate)

  • Convertible Note (considered an equity play)

  • Syndicated Loan (combines sources to reduce risk,or for very large loans)

  • Hard Money (based on asset value versus individual credit score; short term; higher interest rate)

  • CrowdFinance (many, often small, contributers, generally through an online portal)
    • Debt or Equity - equity portals require SEC registration
    • Donation or pre-purchase of products or services

  • Contact Us for creative combinations to accomplish 100% financing

"We Consult on ALL these options, and Structure, Prepare then Deliver to the BEST Financial Resources."
(We usually share points and fees with DEBT providers.)  LUCRATIVE REFERRAL PROGRAM.

Some companies start with our COMPLIMENTARY Overview Review

Other Sources

  • Suppliers (who profit from your existence or growth)
  • Customers
    • Give a discount for a year for upfront cash
    • Commit to a subscription model for a year
    • Government contract with big payment up front
  • Grants (Government, Veteran Benefit, Non-Profit, ...)
  • Sponsorships (for sponsors' exposure on buildings/vehicles/marketing/websites, at events, ...)
  • Government Programs that fit into local/national leadership agendas
  • Owner Carry
    • Seller finances the Buyer
    • 1-2 years to launch project or business
    • Longer if mutually beneficial
    • The note can be sold for the lump sum Seller may need or prefer
  • Loan Assumptions
  • Public Offerings - Initial and Subsequent

Costs

  • Interest
    • 4% - 12%
    • 12% - 15% for "hard-money" and high-risk loans
    • Possible adjustment proportional to the Loan-to-Value (LTV) Ratio and Duration
  • Fees - approximate
    • Initiation/Consulting - 2-6%, minimum $2000
    • Origination - 1-3%
    • Bank Participation (SBA) - 0.5%
    • Not all are levied
    • Total - 4-8%
    • Obtain estimate as early as possible
    • Possible negotiation based on volume and intermediaries
  • Pass-Throughs
    • Business Credit Report
    • Verifications
    • Appraisals
    • Survey
    • Title
    • Recording
    • Inspection
    • Travel
    • Permits
    • Legal - 0.05%, minimum $2000
    • Negotiated Code/Habitability Maintenance
  • At Closing
    • Down Payment
    • Property Taxes
    • Prorated Interest
    • Liens
    • Balance of Current Loan(s)

Loan-to-Value (LTV) and Loan-to-Cost (LTC)

  • Normal
    • 65% - 90%
    • Calculated based on current or after-updated / repair / rehab value
  • Government
    • Up to 95% to 100%
    • SBA, HUD/FHA

Duration

  • Asset-only, 1-2 years
  • 5-25 years, though may amortize for longer

Buying Businesses

  • Set up Lenders in advance based on the collateral to be acquired
  • Be their salesman or consultant for equity and subsistence compensation until you own the company
  • May open up other options, such as Owner Carry
    • With the option to buy at the current price
    • Start implementing your growth policies in advance
    • You'll also learn quickly if you want the company
  • Build relationship so Seller wants you at the helm, not an impersonal Buyer from a different region or culture
  • Once the Seller is very happy to have you as the buyer
    • Have Seller finance equipment real estate, cash-flow, etc to maximum
    • Assume the loans

Submittal Requirements (we sequence, streamline and optimize applications)

  • Project

    • Name
    • Description (one paragraph)
    • Location
    • Govt Approvals (permits, planning commission, etc)
    • Franchise (disclosure documents)
    • Request
    • Purpose (acquisition - full/partial, refinance, cash out; asset, business)
    • Amount (us$)
    • Term (years)
    • APR (maximum; fixed or floating)
    • Owner carry (% range; agreement)
    • Use of Funds (RE, construction costs, equipment, cash out etc; schedule, by year)

  • Business Documents (attachment or online link)

    • Business Plan
    • Executive Summary (condensed Business Plan)
    • Pitch Deck (PPT or PDF with video or script; 10 slides of Executive Summary, to be presented in 20 minutes, in 30-point type)
    • Overview ("Brief"/"Teaser;" condensed Executive Summary) Reviewed, No Charge/Obligation
    • Private Placement Memorandum (for Equity only, based on Business Plan)

  • Financials (entry, attachment or online link)

    • Profit and Loss statement (2020 YTD; if 2019 tax returns not filed, 2019 P&L)
    • Balance Sheet (<90 days old)
    • Debt Schedule (business; current)
    • Sales Tax Rates (if any sales income)
    • Financial Projections (3-10 years)
    • Tenant financial statements (single-tenant properties)
    • Invested to date (us$M)
    • Planning to invest in future (us$M)
    • Income (last 2-3 years; business and personal with 20%+ interest)
    • Tax Returns (last 2-3 years; business and personal with 20%+ interest)
    • Operating statements (3 years)

  • Sponsor (duplicate for each individual or entity with 20%+ interest)

    • Full Name
    • Net Worth (us$M)
    • Liquidity (% immediately available)
    • Credit Rating (personal/business; source; actual/estimate)
    • Bio / Resume (for new ventures)
    • Proof of Funds (for transaction costs, down payment; statement)
    • Passport
    • Foreclosures, bankruptcies, criminal issues (explanation)
    • Accept recourse (full or partial)
    • Industry background (properties/businesses owned/managed, etc.)
    • We Sequence, Streamline and Optimize Applications

  • Collateral (duplicate for each; make entry, attachment or online link)

    • Type (RE, vehicle, equipment, patent, precious metals, gems)
    • Address (include county)
    • Purchase price
    • Date of purchase
    • Estimated value (source; appraisal)
    • Mortgage/Lien balances (statements and amortization schedules)
    • Seasoning complete (if not, date)
    • Year (built, last renovated)
    • Size (square feet/units)
    • Pictures (number to sequence)
    • Insurance policies (fire, theft, flood, loss, liability, etc)
    • Real Estate (personal, commercial)
      • New Purchase (LOI, Agreement, Contract)
      • Owner occupied (%)
      • Tenants (individuals, business & type, government subsidized, etc)
      • Historical occupancy (3 years)
      • Historical sales per square foot (retail properties, 3 years)
      • Rent Roll (if tenant occupied; include extension/termination options, rent steps)
      • Annual Income (rents, vending, )
      • Expenses (taxes, insurance, maintenance, utilities, management, etc)
      • Annual NOI (Annual Income less Expenses)
    • Other information (enhance value, clarifications)

  • Startups (if in business for less than 12 months; special category and documentation requirements)

    • Business Type (real estate, technology, product, etc)
    • Business Documents (see Documentation above)
    • Location (virtual, home, office, facility; base address)
    • Initial Costs (inventory, deposits, equipment, real estate, office setup, accounting, hiring, etc)
    • Business Costs (space, marketing, total payroll, prof services, insurances, vehicle, maintenances, travel, etc)
    • Initial Funding (LOCs, credit cards, 2nd mortgages, F&F, suppliers, customers, associates, notes, seed, etc)
    • Legal Structure (sole, partnership, LLC, Sub-S, C-Corp, non-profit)
    • Trade Name
    • Payroll Registrations (W-2, W-9, W-4, I-9, work comp, disability; local, state, fed)
    • Payroll Compliance (employees, independent contractors)
    • Insurances (officers, fire, vehicle, liability, etc)
    • Accounting System (method, software)
    • Tax Identification
    • Govt Approvals (zoning, permits/registrations/licenses)
    • Patents (submitted, approved)
    • Personal Income Requirements (years 1, 2, 3-5)
    • Professionals (attorney, accountant, bookkeeper, consultants)
    • Groups (LinkedIn, Facebook, Meetup, clubs, chambers)

More

PROSPER SYSTEMS, LLC (.biz)  •  Kenton H Johnson (.com), Founding Member  •  COMPLIMENTARY Overview Review

LUCRATIVE REFERRAL PROGRAM

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Copyright © 2018-2020, Prosper Systems LLC, Denver CO USA. All rights reserved. Latest update, 6/25/2020, KHJ