Sharpen Your Axe to Get Your Commercial Loan Funded

Often the secret for success in any funding effort comes by asking for the right type of loan. If you’ve had problems getting a loan it’s time to sharpen your axe by taking a new approach. As an example, we had a client a few years ago that called us because his local banks were not willing to give him the loan he was after. He needed to get more equipment and hire some additional staff. He had an excellent opportunity to lock down some long-term commitments from a couple of his regular customers. He was just about at his wits end and didn’t know what to do. He decided to call us.

He explained that he had gone to a couple of private lenders he was referred to and still couldn’t get to 1st base. Talking to him we discovered that he had some credit problems revolving around his divorce a few years earlier. His ex knew his social security number and decided to get some new credit cards then ran up the bills and never told him about it. Even though he had paid everything back, it still looked bad on his credit report.

However, he did have some used equipment in good condition that was free and clear. He also had regular income from several creditworthy customers. His problem was that these customers didn’t always pay him on time. This added to his problem, as this would cause him to be a little late making some of his payments.

It immediately became clear to us that he was not asking for the right type of loans to accomplish his goals. We restructured his loan request and freed up some immediate cash for him with his used equipment. At the same time, we got him several hundred thousand dollars for new equipment. Then we took his slow paying customers and got him a commercial line of credit for $300,000 using receivables as security for financing.

He was soon in a position to lock down the long-term contracts and hire the additional staff he needed to grow. This was all done without one penny coming from a bank.

Sadly, this is not uncommon. Many times a good, honest business owner can really struggle to grow their business because they just don’t realize that there are other lenders that will work with them if they provide the right information. Often, it’s just because they can’t find the right lenders that are comfortable with their industry and credit history.

They are out there. Plus, they’re looking for more business people to fund.

If you need help, ask for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

.44 Caliber Commercial Loan Request — How to Tie it Together

Earlier today we were composing an LOI for one of our lending partners — a private equity group when two business partners walked in our offices. By the look on their faces you would have thought someone just shot their dog. We’ve seen the look before so we knew what was coming. They’d been turned down by four lenders. They asked us if we could get them financed and if so how soon they could get funds.

We have a lender that likes the potential of the type of project they have but looking through their loan request it only took us about 20-minutes to see what the problem had been. They still had several loose ends that need to be tied down before funding could be successfully completed.

This scenario is not uncommon. We all want the funds made available to us effective “yesterday”, don’t we? Sadly, that’s rarely possible regardless to how much or how little money you want. Sure, this borrower was only looking for a little over a half million dollars, but he hadn’t really thought things through.

Whether you are raising capital through institutional sources or a private placement, it can be a daunting task. Not only can it take an unsettling amount of time for management but, even for the most experienced, it can significantly increase your anxiety levels while running a business. While it is important to identify your best sources for financing, it is also critically important to focus on tying together all of the necessary components in the transaction.

Why? Because, when properly structured and executed, a good financing deal can lead to accelerated growth as well as increased profitability. However, when it is ill conceived or over-priced, the results can be disastrous.

Conditions change within the financial markets on a consistent basis. To access the funds you need, ask yourself, have I done everything possible to make sure the necessary revenue to service the debt will always be available over the term of the loan? Is there anything else you can do to ensure the loan proceeds provide the returns you want like contracting in advance for your raw material or feedstock? Did you get signed purchase contracts and service agreements from your customers? Have you got your insurance coverage ready to go as soon as the loan or investment is available?

Every day, we talk with developers and borrowers that claim they can’t get these things until they get financed. Yet, we see other developers and borrowers do it every day. And when you consider, it is VERY rare that one can get financed for more than a few thousand dollars without them in today’s lending environment, isn’t it worth the effort?

When venturing into such a dynamic arena with so much to gain, it is only good business sense to rely upon funding professionals with the experience and skill that can get you across the finish line.
If you need help, ask for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

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 http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

To Get Funded… Be Prepared

By now, you should have a sound understanding of the importance of providing your lender or investor with good documentation to support your request for funding. This really is one of the secrets to getting a commercial loan. But, do you actually know what documentation you should share with your lender or investor?

Below is a comprehensive list of the standard documents required to close and fund the loan for your business. Some of the documents listed may not be required depending upon the amount and type of financing you apply for. As many of the documents listed are things you merely need to copy or get from your bookkeeper or accountant, the list should not be something to make you apprehensive.

Be prepared to provide the following to your lender or investor and you can expedite the funding process:

1. Business Plan and/or Executive Summary
2. Resume on each principal & key personnel
3. Financial Projections – Profit & Loss, Bal Sheets (Excel Spreadsheet)
4. Financial Projections – Proj Income 10 years’ minimum (Excel Spreadsheet)
5. Cash Flow Statements -Proj cash flow 10 years minimum (Excel Spreadsheet)
6. Business Operating Cost Breakdown & Analysis
7. Copy of all Intake and Off-Take Agreements
8. Architectural Drawings / Engineering Plans
9. MAI Appraisals of properties
10. Photos (inside-outside) or photographs of land
11. Maps of Project Area – Vicinity Map
12. All Permits and Zoning Documents, Approvals
13. Market Analysis Overview or Demographics
14. Corporate Financials on Business, audited, 3 yrs (if available)
15. Use of Proceeds (in detail) for first-tier loan
16. Use of Proceeds (in detail) for second-tier loan
17. Construction Budget-Business Expansion Budget
18. Corporate Documents – Articles of Incorporation (if applicable)
19. Corporate Documents – Bylaws or Minutes (if applicable)
20. Corporate Doc –Resolution-Authority to Borrow
21. Builder’s Statement, Ins., Licenses, Credentials
22. Warranty Deed (certified copy) proof of ownership
23. Personal Financials – each principal – 20%owner
24. Corporate – Business Tax Returns (3 years)
25. Personal Tax Returns (3 years)
26. Environmental Reports – Phase 1&2
27. Formal Request for Loan/Investment – Business Letterhead
28. Good Standing Certificate
29. EIN Letter
30. Company’s Bank Reference Letter and Bank Statement (for your existing account)
31. Color Copies of Passport and/or Drivers License for Main Signatory and/or Principal

Again, not all of the documents will be required to complete the financing you want. But, regardless to the type of loan you want, you will need to provide several of the items listed.

If you need help, ask us for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

Discover the Keys to Unlocking Your Lender’s Cash Vault

You want financing to increase your revenue and profitability, but do you really know what a lender or investor is looking for? Well pay close attention because, regardless of whether you want $5,000 or $500 million dollars, lenders and investors want pretty much the same thing. They want a transaction with minimal or no risk.

No surprise there, huh? Well how do they determine the level of risk associated with a transaction? There is no short answer to that question, but we can start with a responsible, experienced and innovative management team. They look for management teams that:

• Are interested in building a sustainable and profitable business model
• Has industry experience in developing a successful business
• Works well together, complementing each other’s collaborative style
• Has skin in the game from investing their own funds in the business
• Has a management integrity that incorporates respect for their employees

Strong management teams are far more likely to establish the day-to-day operational procedures that lead to success. They have that rare perspective gained by experience to identify changing market trends and know what to do to address them and still gain market share. With a strong management team, even prior credit issues are less of an issue during the funding process.

If you have a well-planned project, credit worthy customers, sensible contracts and a willingness to cooperate, then you can find a lender or investor that will be privileged to help and finance you in growing your business. If one lender or investor won’t do it, another one will. You just have to provide them with a well conceived, compelling proposition

What we’re talking about here goes right back to good, comprehensive documentation. If you’re not sure what that documentation should be or how to say it, feel free to ask for help. Remember, the only bad question is the question never asked.

Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

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 http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

Peeling Back the Curtain of a Typical Funding Process

Want to know what happens when you your loan application or request is received? In most cases, it will go something like this…..

The first look

In most cases, your lender wants to make an initial determination of interest and fit in a matter of a few minutes after receiving a business plan or formal request for investment. So, be sure to provide a compelling description of how your plans for the loan or investment proceeds are safe and profitable.

If they do decide to move forward, the review process moves at a deliberate pace from there. But if your company is too early stage or your opportunity doesn’t quite suit them today for other reasons, don’t stop here. I assure you, there are other lenders that may be a better match for your individual situation.

A longer conversation

Those companies that do meet with the lenders financing or investment criteria move on to the next step in the process. Often that’s a meeting or conversation with the management team. The lender’s goal in this meeting is to learn more and evaluate the company’s management team, business model and market prospects. They will want to see if there is a good overall fit between their operating philosophy and yours. If there is a mutual interest in proceeding further, additional conversations or meetings will typically follow.

The conversations and meeting will include additional research and analysis of the business with the goal of better understanding the company’s long-term potential for success and how they might contribute to that success. You should be prepared to discuss your products and services, your market’s dynamics and competition as well as your market positioning and what individual attributes will spell success for you. You should have already developed and shared some comprehensive financial models to help bring the range of your upside potential into sharper focus.

Virtually all of our applicants and development partners find every lender’s due diligence process to be overly thorough and too time-consuming. In a typical scenario, the entire financing process from first meeting to funding can range anywhere from 45 days to several months, depending in part on how long it takes to negotiate a term sheet and provide any additional documentation required. The time from signing a term sheet to closing an investment typically ranges from 45 to 90 days, depending in part on how well the lender or investor knows the business and borrower at the start of due diligence but also how quickly you can facilitate their due diligence process.

You probably won’t like it, but the truth of the matter is, lenders and investors rarely communicate actively and openly through the entire investment process. Many find that this approach facilitates a natural timing to a successful close that fits the particulars of the investment. So, don’t hesitate to call them every couple of weeks if you haven’t heard from them or made other arrangements.

If you need help, ask for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

Don’t Overlook the Obvious — Share Your Vision to Get Funded

Earlier today I spoke with a very successful gentleman that specializes in financing dairies. We both had to agree that many more loan applications would be approved and funded if the borrower or developer did a better job with their documentation. So what’s the secret of getting deals funded? Funding gets approved based on the documentation… not based on conversation.

So when you’re ready to complete your application or send in your loan request, ask yourself: Have we included all the documents requested by the lender? If you cannot provide a specific document that was requested, explain in writing why not. If you’re business is too new, say so. If you haven’t got your tax returns back yet, say so. It doesn’t matter what the reason is, say so. Obviously, you always want to be tactful in how you say it, but say it.

Ask yourself: Have we been very thorough in describing what you want to accomplish? Can the lender or underwriter see the vision and embrace our request? This is accomplished by being thorough, but not too technical. Yes the entire point is to get the lender to embrace your vision. Have you told them why you are a safe applicant to lend to and/or partner to work with?

You also want your financial model or proforma to be clear and thorough as well. Cab you show the lender you understand your business and know how to make it grow? Have you shared realistic numbers with them? Don’t base your projections on the high end nor do you want to be too conservative either. If you do, you run the risk of looking like you don’t know how to run a successful business. That will likely get you a big red NO stamped on your application or loan request.

It is also very likely that you will need to share several prior years of tax returns and financials. Make sure they are legible and in order. If not, take the extra few hours necessary to make sure they can be easily read. Again, the easier you make it on the lender or underwriter, the better your chances.

As an example, we’ve had clients in the past that had very strong applications and loan packages, but didn’t qualify for the lender. On several occasions, the lender or I have referred these applicants to other lenders that were the right match so the applicant could get funded.

So please, don’t overlook the obvious. Be honest, be thorough. And feel free to ask if you need help.

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 http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

How To Get Your Loan Request Approved Faster

You want financing. You know that your business is a people business. One of the main objectives of a people business should be to make it easy to do business with you. So let’s help you make it easy for your lender to do business with you by approving and funding your loan request.

We review loan requests and new projects daily for a direct lender and a private equity group. Did you know that you can avoid the pet peeves that many underwriters have? A real thorn in the side of the underwriter’s and lender is when a developer or borrower will virtually hide how much capital they want to raise. We often get an executive summary’s or copy’s of a business plan and are expected to hunt through pages and pages of fluff and non-essential information to find out how much money they want to borrow.

Remember, we are in the finance business. We are NOT in your business or industry. We may look to support your industry or class of business, but we are in the business of providing growth capital in one form or another.

Consequently, on page one, you should always be sure to prominently state how much money you need to borrow to accomplish your goal and how long you want to pay it back.

If you know what type of loan structure(s) you want to utilize, please add that as well. For instance, if you want to secure the loan with real estate, inventory, equipment, receivables, stocks, bonds, etc. or any combination thereof, say so. This can help you save lots of time and make it easier for the underwriter to move your loan request along to approval. If you make it hard for the underwriter or lender to find the information they need, then you will find it far more difficult to get what you want.

Second, don’t try to tell the lender what kind of rate you want. By doing so before they are truly interested, you will probably find your loan request rejected. Do NOT kid yourself thinking you will qualify for the same rate as Microsoft or IBM. It’s highly unlikely you will. However, once you do have some documented interest from a lender in the form of an LOI or term sheet, that’s when you can discuss better interest rates.

Third, when you provide your projections in a proforma or financial model, most underwriters prefer to see them in an Excel spreadsheet format as it is far easier to track line items over several months or years. Often we’ll get a proforma or financial model in a PDF and end up having to tell the developer/borrower to convert it to an Excel format. This can add several days to the approval and funding process. But, with just a little forethought, you can easily avoid such a delay.

Remember, your lender and their underwriters, can be critically important to the growth of your business. But, at the end of the day, they are just human. Try to make it easy for them to understand your vision. Try to make it easy for them to do business with you.

If you need help, ask us for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

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 http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

How to Get Money for Business Success

Many business executives and owners pose a simple question: How can I get money? We need working capital. We need to upgrade our equipment. We need a line of credit. Where can I get money?

Getting your business financed is arguably one of the most important steps needed for success. Yet very few business owners really understand how lenders, underwriters and loan committees make decisions. Like many businesses, yours may be faced with the challenge of needing to raise funds or you’ll limit growth and miss profit opportunities.

So off you run to your bank and “ask” for a loan… only to be faced with the less than favorable response. Asking soon becomes one frustration after another and then many simply give up. Sound familiar?

Well don’t give up… there is more than just hope… success may be only one strategy around the corner. That’s where this blog proves to help. It will show you where to get money. It will show you how to get money. There are very common mistakes, misconceptions and misunderstandings in getting approved and successfully funded that we’ll help you avoid.

Once you know how to ask to get money, where to ask to get money and who to ask to get money… you’ll find that success can be as simple as
‘painting by the numbers’!

In this blog you’ll discover priceless knowledge in business financing that even most bankers, CPA’s, attorneys and loan brokers don’t know or won’t tell you.  Why is that? The answer is in specialization.

Bankers specialize in the lending appetite of their employer who may have little to do with your specific money needs. Attorney’s specialize in legal aspects of loan contracts but may not have all the answers that you need to acquire funds for your business. CPA’s specialize in financial reports and tax issues, but just like the attorneys, they share the same disadvantage of not fully understanding how to get you across the financial finish line. Loan brokers often specialize in a particular type of loan, such as real estate or SBA financing and may look at your loan through the wrong “set of glasses.”

You’ll Learn How to Think Like a Lender and Get Money…

What if you could be a fly on the wall during a ‘loan committee’ meeting concerning your loan request? Better yet, what if you could set the stage in your favor? It’s not only possible, but highly probable once you know the strategy.

The good news is… you’re not stranded! This blog is your compass and will help you cut straight through the red tape to find your way to securing business loans from banks and private lenders alike.

Most traditional lending sources only offer programs focused on particular industries and certain sized business that they’re comfortable with, which may not match the needs of your business or project. On the other hand, there are virtually dozens of viable programs and hundreds of funding sources worldwide that are compatible with your needs. Most importantly, what this means to you is, you can now access the best programs and sources of cash for your specific money needs!

We’ll be covering the following types of loans and how your best strategy may ultimately be a combination of these loans that most appropriately fits your business:

• 100% Financing
• Contract Financing
• Project Financing
• Acquisition-Funding
• Start-up Loans
• Inventory Loans
• Accounts Receivable Loans
• Factoring
• Purchase Order Financing
• Working Capital Loans
• Agricultural Loans
• Equipment Leasing
• Loans using equipment as collateral
• Commercial Property Loans
• Unsecured Borrowing
• Business Lines of Credit
• Warehouse Financing
• Machinery Loans
• Flooring Lines
• International Loans
• Real Estate Development Loans
• Construction Financing
• Virtually ANY Type of Business Loan

There are sources of cash ready to handle any type of legitimate business loan or lease you need. However, most business owners don’t know who they are or what to send them.

This blog is where you learn….

If you need help, ask for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

When you ask the question: How can I get money? You can contact us to ask questions, we’ll advise you how and address your concerns. Just pick up the phone and dial, CFIC Funding, Inc. It’s where to get money. Call us today at 310-421-7370!  Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com