Tag Archives: estate
Introducing High LTV Auto Dealer Financing Using Enterprise Value
This product is ideal for those dealers who are looking to rapidly expand their business by allowing them to obtain loans in excess of 100% of their real estate value. Unlike conventional lenders, Auto Dealers Capital is able to provide financing against a dealership’s goodwill or reputation, also referred to as the Enterprise Value, allowing borrowers to benefit from higher loan amounts which are typically unattainable with traditional financing venues.
Why is the High LTV program unique?
- Enterprise Value takes into consideration a dealership’s market penetration, profitability, franchise strength, and future performance to allow loans to be underwritten up to 150% of the real estate value.
- Ability to generate proceeds in excess of that provided by traditional lenders and/or captive finance companies, who typically will not lend above 85% LTV, even for larger dealers.
- Individually customized loans for the dealer’s specific needs work to unlock the long-term value of their investment without exposure to unreasonable risk. Usually, full personal guarantees are only required for the loan amount portion in excess of the real estate value.
What are the benefits of the program?
High LTV (Loan To Value) Auto Dealer Financing is essential for dealers looking to gain working capital to take advantage of any of the following expansion opportunities:
- Acquire other dealerships to increase market share, maximize brand awareness and increase profitability along with satisfying other future capital needs as they occur over time.
- Create Employee Stock Ownership Plan (ESOP) for tax benefit advantages and increased personal liquidity while maintaining operating control.
- Reduce financial risk by refinancing short-term debt with variable interest rates to long-term debt with fixed interest rates.
- Eliminate needing or adding partners or to gain control by buying out existing partners.
- Increase customer satisfaction by improving facilities and providing new services and technologies or even for the purchase of the underlying dealership real estate.
Business Loans – 7 Reasons Not To Use A Bank (Page 1 of 2)
So you’re a small business owner and you need a business loan to further the objectives of your company. Where do you turn?
When it comes to a business loan or commercial real estate loan, there are many good reasons NOT to turn to a traditional bank. Here are some of the most important reasons. Many small business owners, will find most of these points directly applicable to them.
“THE BANK TURNED ME DOWN”
Of course the biggest reason most small businesses go looking for alternative sources of commercial real estate loans is because they have been declined by the banks. Small businesses are often forced to look for other sources of funding because the banks will not provide it. This is not even listed below, since there are many positive reasons to prefer non-bank funding, EVEN IF YOU CAN get an approval from a bank.
REASON 1 – The minimum loan amount available from banks is too high
In many cases banks will not offer a commercial real estate loan for less than $250,000. So if you only need $100,000 you will be pushed to borrow more than you actually need. Or if your property will not support a $250,000 loan you are out of luck with the banks.
The solution is to look for an alternative funding source that can provide a lower minimum amount. Some commercial financing services will go as low as $100,000, and will often give you better terms and much better service than the traditional banks.
REASON 2 – Many traditional banks will charge you an up-front “commitment fee” just to examine and process your application
Banks usually think they are doing you a favor by processing your application, so they will often make YOU pay for their attempts to win your business.
The solution is to find other established and credible lenders who are eager to offer you better service without charging you a fee for processing your application.
REASON 3 – Most traditional banks will severely limit the amount of cash you can get from a commercial real estate loan.
Banks usually have very narrow rules about where you can use the cash derived from a commercial real estate loan. If you need a cash injection for your business, or want to use the proceeds from a commercial mortgage as a down payment for another property, most banks will not be interested in that type of loan.
Look for a lender who does not restrict your use of the cash derived from commercial real estate loans. Some services, (see links below) can provide commercial loans that give you up to $1 million in cash to use however you want.
REASON 4 – Most traditional banks require detailed business plans before approving a commercial real estate loan.
Many small businesses have business plans, but they are usually not sufficiently detailed to satisfy the banks. As a result, applying for a commercial real estate loan from a bank can turn into a very time consuming and expensive process. Creating the type of business plan that is adequate for the banks will usually cost thousands of dollars.