March 2020 - Programs to Highlight

No Tax Return Owner-Occupied Commercial Property Financing:  Under this program we can get financing on 50% or more owner-occupied commercial properties based on historical operating revenues for the operating company verified via bank statements for the company, with cash-out possible up to 75% of property value. The loan is a 5/1 Arm with rates fixed for 5 years and adjusting each year thereafter with a 30-year amortization. Interest rates start in the mid 5% range and go up from there depending on the owner’s credit score and loan to value. Whether your company has had positive net income or losses the past couple of years, this is a great program to take advantage of the equity in your owner-occupied commercial property, without having to worry about going through the heavy underwriting and global cash flow analysis you would experience with your traditional bank lender.

 

No Historical Income Verification Investment Property Loan:  Under this program we can get financing on commercial investment properties based on rent rolls and the cash flow contained in the appraisal versus using historical tax returns. We can finance, with cash-out, up to 75% of the appraised value of the subject property. The lender typically looks at the current rent roll, leases in place, a historical operating statement, and the cash flow provided by the appraiser in making the credit decision. There is no reliance on tax returns or a global cash flow. This product is perfect if you have a performing commercial property but report little income individually, or if you under-report cash flow on the tax return for your investment property but still want to borrow more money against that property. The product is also a 5/1 Arm mortgage with rates fixed for 5-years and then adjusting each year thereafter and the amortization is up to 30 years.   Interest rates start in the upper 5% range and go up from there depending on the owner’s credit score and loan to value.

 

30-Year Fixed Rate & No Tax Return / Single Family & Multi-Family Investment Property Program:  Non-bank lender offering 5, 7, 10 and 30-year fixed rates on single-family investment and multi-family investment properties, with rates starting in the low 5% range on up depending on property type, loan to value, and borrower credit score. The lender does not underwrite the borrower’s personal or global cash flow, and they do not require tax returns. The lender underwrites each property based on the lease(s) and cash flow in place, the credit score of the borrower, and the loan to value of the property. You can cash out up to 75% of the appraised value of the property for properties owned six-months or more. This is a great product to maximize cash-out and to secure a long-term fixed rate on residential investment properties and small apartment buildings, without having to worry about proving historical cash flow or going through a global cash flow analysis.

 

Asset Based Working Capital:  We have a wide variety of lenders providing working capital via factoring or other asset-based lending, without concern over historical cash flow or profitability. So long as revenues and receivables are available, we can typically secure financing. Financing is often more expensive than traditional bank lines of credit, but advance rates are typically higher than what traditional banks offer and underwriting to qualify is much simpler. These programs are perfect if the company is not reporting much cash flow or there are global cash flow risks, but there is plenty of collateral to borrow against via inventory and receivables.

 

SBA 7A Business Debt Consolidation & Refinance:  Although the SBA 7A program can be used for a number of purposes, the ability to use it to consolidate existing business and owner-occupied real estate debt is often times over-looked. Even though a businesses’ existing debt may no longer cash flow with their traditional bank lender who has the debt on short amortizations, sometimes consolidating that debt into an SBA 7A loan will allow the amortization to get extended out allowing the cash flow to work. If business assets are the only collateral, on a debt refinance the SBA uses a 10-year amortization versus bank amortizations typically in the 3 to 5-year range. If a 51% or more owner-occupied commercial property is the primary collateral, than the amortization is 25 years on all debt rolled into the loan, even if some of that debt is other business debt and not mortgage debt. If slightly more debt is business asset related versus real estate related, there is the opportunity to do a blended amortization between the business debt at 10 years and the real estate debt at 25 years, with the amortization blended somewhere between 10 and 25 years. In order to qualify for SBA 7A loans you do not have to be fully collateralized. Even if there is a collateral shortfall, so long as the cash flow works with the SBA amortization used, we can do the loan despite the collateral shortfall. In addition, you can refinance any type of business debt including working capital debt, inventory debt, equipment, partner buy-outs, 51% or more owner-occupied real estate, and even business credit card debt (if you can evidence the original use of that debt was for the business) into the SBA 7A loan. You can also get fresh working capital, money to buy equipment or owner-occupied real estate, etc. This is a great program if your existing lender will not renew your loan or give you additional capital due to either tight cash flow based on that lender’s underwriting conditions or a lack of available collateral.