2. Private Lending
Private lending entails the pooling of various
investors monies.
Interest rates increase relative to institutional loans.
The loan to value percentage reduces to 50 or 65%.
The loan application is smaller about two pages.
Financial documentation is less. As long as the loan
makes sense, the loan can close in as little as 10-14
days.
clcapitalpartners.com
3. Institutional Lending
Institutional lending for commercial and residential
properties is more paper intensive.
Interest rates are lower, generally.
The borrower can achieve 95% loan to value.
The credit needs to be 680 and above.
The process becomes very involved and the amount
of time it takes to close increases to 45-60 days.
www.fanniemae.com
4. Commercial Development
Commercial development entails a wide variety of
project financing.
Tract home building, shopping mall construction,
golf course production, oil and gas lines installed,
electrical grid production present just some of the
areas this part financing helps build.
When dealing with these types of projects, funds
come from the financial markets.
5. Debt Financing
Debt financing allows a small or large business to
retain full control of the business.
It allows the business to borrow against its various
forms of collateral.
This collateral can come in many forms.
Some of these forms include: accounts receivable,
equipment, real estate, and goodwill invested in the
business.
www.mint.com
6. Equity Financing
Equity financing means you receive funds from a
venture capitalist.
He or she takes a percentage stake in the ownership
of your enterprise.
A good referral to update your understanding watch
Marcus Lemonis show, “The Profit,” on CNBC.
www.marcuslemonis.com
7. The Business Plan
In both cases, the customer must have a command of
their financials in detail.
They must develop a detailed business plan.
Read Rhonda Abrams book, “Business Plan in a Day”
3rd
Edition. She will outline the following:
8. The Business Plan Part II
Create the executive summary. It outlines what your
business does and who it serves.
A company description explains how your business
model accomplishes its goals.
Develop a target market. This market represents the
people or businesses that will benefit most from your
business.
9. The Business Plan Part III
Perform some research. Find out who your
competitors are. And how do they accomplish helping
their customers.
Prepare a plan of action. How will you market your
product or service? How will you generate sales?
Plan how your business will function more efficiently
than your closest competitor.
10. The Business Plan IV
Build your management team with smart, dependable
people.
Know where you want to be over time. Your sales
should start at X the first year and by 5 years should
be Y.
Keep a good ledger of all dollars going in and coming
out. Use Quickbooks so that every month you can
prepare the necessary financial statements and check
the health of your firm.
Editor's Notes
These monies allow the borrower to obtain a loan against commercial or residential real estate. Generally, all you will need is the first page of the last two months bank statements that reflect good cash flow and pages one and two of your tax returns.
The applications ask for more information and many disclosures. The benefit the customer receives is higher loan to value tolerances. All pages of two months bank statements must be presented. All pages of the tax returns both personal and business must be given. Property tax and insurance statements
provided.
Legal derivatives financial market makers sell. Once sold, the funds are released and construction can begin.
