Are You Making THIS Commercial Borrowing Mistake?

Did you ever know someone that let their ego stand in the way of their own success? A few years ago, we had a client that wanted to borrow tens of millions of dollars for the construction of a 4 star hotel. Here’s a man that spent lots of money to buy the land, get the architectural work done, engineering, MAI appraisals and environmental studies completed. He even developed a better than average business plan and a decent financial model (proforma).

What was the problem? Well, he had a good management background in manufacturing and distribution. He even bought and managed a strip mall and owned a couple of small eateries that turned a profit. But, after he transitioned away from manufacturing and distribution, he ran into some tax problems. Seven digits worth of tax problems. Sure, he regularly made his payments, but it still looked bad on his credit reports.

Yet, his tax problems were not insurmountable. He still had a project with potential and some equity in the strip mall and land where he wanted to build the hotel.

Ultimately, what caused his failure to get financing was his insistence on managing the new hotel himself, even though he had absolutely no experience in hospitality. If he had been willing to do what the banks and private lenders suggested, we would have been able to fully fund his development.

All that was needed was to “flag” the hotel with a name brand hotel chain and contract with them to manage and operate the facility. But, he was determined to save the 5% management fee and convince the world that he could do it himself. The last time we spoke with him, he still needed financing and his land remained vacant. A clear case of ego run amok.

Financing for the hospitality industry is readily available for those with good plans and cooperative dispositions. If you need help getting financing for your needs, call us and we’ll see what can be done to move your plans forward.

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

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