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Funding Options - Debt and Equity

Mainly Debt Capital, but some offer part or all required Capital for some Equity in the Company or Project.

"We Consult on ALL these options, and Prepare then Refer you to DEBT options."
 
Sources:

  • Conventional Banks
  • Community Banks
  • Credit Unions
  • Non-Bank Lenders
  • Alternative Lenders
  • Bridge Lenders
  • Local Family Offices
  • High-Net-Worth Individuals
  • Community Collaboratives
  • Other types of Alternative Lenders

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

 
Types:
  • Conventional (65%-90% Loan to Value, LTV - or Cost, LTC)
  • Second (remaining 10%-35% LTV or LTC; higher interest rate; though most CRE lenders don't take or are not allowed to take second position)
  • Line of Credit (including Credit Cards, revolving Seconds; higher interest rate)
  • 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)
  • Convertable 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)

  • CONTACT US for creative combinations to accomplish 100% financing

"We Consult on ALL these options, and Prepare then Refer you to DEBT options."
 
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

 
Buying Businesses:
  • Set up Lenders in advance based on the collateral to be acquired
  • Be their salesman or consultant for equity and subsistance 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

 
More in the book description, Customer-Funded Business

Debt Lenders

Equity Funders

Additions appreciated

 

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

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