Acquisition and development financing, involving a SBA “Certified Development Company” (CDC), provides you with long-term, fixed-rate financing for major fixed assets (land, buildings, etc.). This program contributes to community economic development. The CDC works with commercial lenders to provide another financing option to businesses.
This program includes a loan from a commercial lender that covers 50% percent of the project and a second loan for up to 40% of the project cost from the CDC that is 100% SBA guaranteed for a combined 90% LTV.
Acquisition and development financing is an excellent option for a business that is looking to acquire more land to expand their current operations. The government supports this program because they understand the kind of economic impact a growing business can have on a community.
Funding from an acquisition and development program can be used for:
• Purchasing land and improvements, including existing buildings
• Grading, street improvements
• Utilities, parking lots and landscaping
• Construction of new facilities
• Modernizing, renovating or converting existing facilities
• Purchasing long-term machinery and equipment
The loan program cannot be used for: Working capital or inventory, consolidating or repaying debt, refinancing, employee wages, or marketing expenses.
Raising capital – Private investors are an excellent way to raise capital.
Raising capital through private angel investors, venture capital, and business startup funding is one of the best ways to get a young company off the ground. Private individuals who contribute their skills and also money to help younger companies are the best methods for raising capital. These investors also include angel investors or venture capitalists. They can provide your business extra working capital that can be used for marketing, purchasing of property, purchasing of another business, or for just about anything else for the growth of your business.
Often times raising capital can be difficult if your businesses business plan is risky. Most banks will not fund a risky business proposition, but an investor will because they like having the opportunity to earn a high return on their investments. If you have a unique product or service in an industry with a large market obtaining financing through investors will be a fairly simple process. They want to make sure they can get at least 30 percent on their investment so if you can guarantee that you will almost always find a willing investor for your business.
Once you find investors you need to make sure you have a good funding proposal in place. The investors want to see in depth information on how much money you need to run your business, and they also want to see how that money will be spent. You also need to have an exit strategy planned out for the investors showing how money will be earned and paid back.
Letter of credit is a document issued by a bank which guarantees the payment of a customer’s drafts for a specified period and up to a specified amount.
Letters of credit are commonly used today in international trade when a supplier in one country does business with a wholesaler in another country. If business A wanted to purchase a large order of supplies from business B, business A would go to their own bank and request a letter of credit.
When business A is approved, their bank will send the letter of credit to business B’s bank. Business B’s bank will then notify business B that the letter of credit was received and they can now ship the order with full assurance of payment.
When the proper documents are presented as stipulated in the contract, business A’s banks will transfer the payment to business B’s bank which will then credit business B’s account. The banks only deal with the documents and not the transaction itself.
Letters of credit can also be used in the process of land development to make sure that previously approved public projects will be completed. These projects can include sidewalks, sewers, and streets.
The parties involved in a letter of credit are the beneficiary, the issuing bank, and the advising bank. The beneficiary is the party receiving the money. The issuing bank is the bank of the applicant and the advising bank is the bank of the beneficiary. The applicant, however, is not included in the parties of a letter of credit.
Minority business loans help encourage female and ethnic minority business owners to start their businesses. There are many financing options open to minority business owners including loans. A federal agency called the Minority Business Development Agency (MBDA) provides resources and information for minority entrepreneurs.
The Minority Business Development Agency has a main focus of growing minority owned businesses through the usage of minority business loans. This organization also controls many Business Development Centers which can assist minority business owners with writing business plans and more.
Obtaining minority business loans is not a difficult process if you take the proper approach. It is extremely important that your business has a plan in place before applying for a business loan. This plan should include overall how your business plans to make money, but most important to lenders will be some of the financial details. This would include information such as exactly how much capital is needed, and what this capital would be used for. The more detailed you can be, the better your chances of approval for the loan. The lender also wants to know how you plan to pay back the loan.
Having a plan is only a start as it is also important to have business credit scores in place. These scores are similar to personal scores, but they are different. It is just as important to have good business credit scores, as it is to have good personal credit scores.
Commercial credit line , is it right for your business? A commercial credit line is a loan from a bank that the borrower can access at any time and only take out how much it needs. A commercial credit line is basically a way for your business to be able to access funds, as it needs them, up to a certain amount previously agreed upon by you and the lender. This eliminates the possibility of over borrowing since your business only borrows what it needs.
Five Good Reasons
- A line of credit can be utilized to take advantage of a unique business opportunity or cover unexpected shortages of cash.
- In most cases, the entire credit line is available as cash, and the same APR applies to both cash and purchases.
- Interest is paid on only the accessed portion of the credit line, which is replenished as the balance is paid.
- There is the option to pay the balance in full or to extend payments over time.
- A business line of credit also provides the ready cash needed to purchase inventory or carry accounts receivable.
Combine all of the above factors with a competitive interest rate and a line of credit proves to be an excellent vehicle for cash flow management. We can help you find a great funding source for a commercial credit line for you business.
Investment capital: Determines the ultimate success of your business.
Investment capital within a company can make a big difference as far as the success of a company is concerned. Having access to extra capital is a commodity that most business wish they had. Any form of capital whether it is obtained through sales, debt financing (loans), or equity financing (investors) could potentially be viewed as investment capital.
Every amount of money spent is an investment within a business. We are committed to raising capital for you professionally, in a manner that is consistent with the timing parameters of the assignment, and on terms which give you a financially competitive advantage. In addition, we provide an analysis of the benefits and risks that underlie differing financing options.
Investment capital funding services include:
2. Debt financing
3. Technology licensing agreements
4. Real estate and project financing
5. International trade agreements
6. Joint venture agreements
7. Private equity placements
Obtaining capital for your business or commercial real estate development project doesn’t have to be the dreaded experience that most entrepreneurs endure.
Hard money lender is fast access to the capital needed from private investors.
A hard money lender may be exactly what your business needs because you are consistently hearing no from the banks when you are attempting to obtain financing. A hard money lender is typically a private lender that will lend money to more high risk companies because they can charge a higher interest rate.
They also provide short term loans which are also referred to as bridge loans. The interest rates on these loans are typically between 11% and 16% for real estate hard money loans, which is much higher than the average bank. They give money on the following criteria:
• $50,000 to $20,000,000 per transaction on the same project
• Up to 75% LTV improved structures, up to 55% LTV raw land
• Commercial property purchase, construction, or refinancing
• Bank workouts, bankruptcies and foreclosures are common
• Loans on commercial buildings, vacant land, and more
With “private lenders” the hard assets are the key.
Hard money loans are property-driven and typically have a much quicker turnaround. Creative transactions such as: interest only payments, partial deed release, and participations are usually considered.
A hard money lender enables your business to get the financing it needs much faster than if you were waiting for a bank to close. Make sure though that you have a good business plan in place and an excellent strategy for how the funds will be paid back. Whether it is a hard money loan or a regular bank loan the lender wants to make sure the money will be paid back.
Small business loan is financing for your business success.
Small business loan capital is one of the more common methods of raising financing for your business. A loan of this nature can be obtained through a standard lending institution like a bank or from the U.S. Small Business Administration (SBA). They help entrepreneur’s everyday by providing guaranteed loans. The qualification process for a small business loan from the SBA has become easier over the years.
There are factors that help determine whether your business will qualify for a small business loan. If your business has been fully operating for more than two years, you have fewer than 500 employees, you are independently owned and operated, generate annual revenue between $1 million and $20 million, and are in the manufacturing, wholesale, distribution, professional services, or retail industries than there is a very good chance that you will qualify for a SBA approved loan. These loans are guaranteed for commercial real estate purchases, equipment acquisition, working capital, and much more.
Preparing your business properly before going after a small business loan is essential. Having a business plan is extremely important, along with knowing exactly how much money you need for your business, and how those funds would be used. While you get those in place it is important that you also understand the importance of having established business credit scores.
They act like your regular personal credit scores as they determine the credit worthiness of your business. Make sure that you totally separate all personal credit from business credit. Apply for all business loans and lines of credit using your business tax ID number instead of your social security number. Also make sure that the lending institution you are receiving funds from reports your payment history to the Small Business Financial Exchange. Our Business Finance Coach includes more information on setting up business credit the right way.
Credit Suite helps you get business credit for your EIN that’s not linked to your SSN with no personal credit check or personal guarantee. Get approved even when you can’t qualify for a business loan with no cash flow or collateral requirements.
Credit Suite helps you get approved for credit lines and loans to start and grow your company- even when banks say “NO”. Get the money you need when you need it, and enjoy great interest rates and low monthly payments through hundreds of lenders and investors.
Here are just a few of the most sought-after loan programs you can access through Credit Suite:
- Unsecured Credit Lines up to $150,000 Even for Startups
- Business Revenue Lending and Cash Advances with 72 Hour Funding
- Account Receivable Loans and Credit Lines with Rates of 1% and Less
- Purchase Order Financing and Inventory Credit Lines
- Securities and 401k Financing
- Equipment Financing and Leasing for Purchase and to Refinance Existing Equipment
- Private Investor and Alternative SBA Financing
When you work with us, you’re not working with a faceless and gigantic banking organization. Right away, you’ll be assigned to your own personal Finance Officer who will work directly with you to develop your Finance Blueprint with all the funding options you can qualify for now.
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How to establish business credit, is a step-by step process. The first step is for you to make sure that your business foundation is set and that your business has done the simple items that lenders require and that will at least get you listed with the business credit agencies.
Once you have made sure that your business foundation is correct, the next step is to develop business borrowing relationships vendors and suppliers that are willing to extend to your business credit payment terms and that will report your payment history to the business credit reporting agencies. You will need five such vendors and/or suppliers that extend this credit without it being tied to you social security number or personal guarantee.
To establish business credit, the third step is to obtain three business credit cards that are not connected to you personally and that all report to the business credit agencies. Unfortunately out of more than 500 business credit cards, there are less than 60 that will even consider approving you without using your personal credit too.
Once those steps are complete you can then build on those credit relationships and use them as references to obtain larger and larger accounts. Remember, how to establish your business credit is a process that can only be completed if those who extend your business credit report to the bureaus.
The most important part to establish business credit is to separate your business credit from your personal credit. When you use personal money or credit scores to secure funding for your business, you become personally liable for all your business debt. Then, if the business fails your personal credit gets destroyed too.