Collateral Problem Solved by a Commercial Line of Credit

We had a client that was turned down by several banks. The problem was they were asking for the wrong type of loan for their needs. They believed their strongest asset was the real estate where the business was located. It was free and clear and the appraisal was strong. So what was the problem? The environmental report was damaging. The business was built on a former landfill. In addition, they were going to banks and real estate brokers who had packaged the loan as a real estate loan.

How did we solve the problem and get them viable offers from the right lender?

After several probing questions we uncovered the real strength of the business. Here’s how. The business had two separate operating entities. One was the landlord for several other businesses. The other entity was a market with a very strong cash flow and parking lot that was always packed with plenty of foot-traffic and a strong credit history.

We repackaged the loan request for a commercial line of credit using the historical financials as the primary security for the loan. A lender wants to know how their risk is off-set, so we identified the right lender and showed them how there was little risk because of the nature of the business, the strong loyal customer base and consistent positive cash flow.

By shifting the focus of the loan to the cash flow of the borrower rather than the real estate, we were able to secure a $2 million dollar commercial line of credit for our client.

In fact, the line of credit worked out better for the client than a real estate loan. The line of credit (LOC) can be used when needed and there’s no interest on any portion that you don’t take. But the real issue here is that you can save yourself a lot of time and wasted energy by asking for the right type of loan for your individual situation. If you’re not sure what type of loan(s) will be best for you, call us for a free consultation.

A Commercial Line of Credit offers a business a great amount of flexibility.

You can use a line of credit for the following solutions:

• Fund seasonal changes in inventory and receivables.
• Take advantage of vendor discounts.
• Meet unexpected cash needs.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-370-4871! Ask for David Young or Wayne Clinton. You can also visit or mail or