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Finance Options - Debt and Equity
FREE Informational LIST
Focusing on Commercial Real Estate and Associated Technology

"We Consult on ALL these options, and Structure, help Prepare then Deliver to the BEST Financial Resources."


Table of Contents

  1. Sources
  2. Specialties
  3. Types
  4. Other Sources
  5. Costs
  6. LTV/C
  7. Duration
  8. Buying Businesses
  9. Submittal Requirements
  10. More
  11. Contact

  • Conventional Banks
  • Community Banks
  • Credit Unions
  • Non-Bank Lenders
  • Alternative Lenders
  • Bridge Lenders
  • Retirement Accounts
  • Local Family Offices
  • Insurance Companies
  • Pension Funds
  • Incubators
  • Community Collaboratives
  • High-Net-Worth / Private Individuals


  • Cash-Flow Lenders
  • Equipment Lenders
  • Vehicle Lenders
  • Single-Family Lenders
  • Commercial-Only Lenders
  • Hard-Money Lenders


  • Conventional (50%-90% Loan to Value, LTV - or Cost, LTC)

  • Small Business Administration (SBA - up to 90% LTV or LTC on Commercial Real Estate or general business development; good interest rates).

  • Housing and Urban Development / Federal Housing Authority (HUD/FHA insured - multifamily - health care, elderly, special needs - several, complex programs)

  • Second (remaining 10%-35% LTV or LTC; higher interest rate; though most CRE lenders don't like to or are not allowed to take or work with a second position)

  • Using Investment Capital for the 10%-30% loan down payments, optimizes your profit perspective - Contact Us for the most-lucrative solutions

  • NEW: Factoring Invoices / AR & Payroll Financing (up to 97%, as an Operating Expense vs Debt)

  • Lines of Credit
    • Revolving Seconds on home or assets; higher interest rate than fixed
    • Under $30K; community banks and credit unions; unsecured, no/low documentation; higher interest rate after promo period
    • Under $300K; services available to float one application to several lenders; some focus on those using the same higher credit bureau reducing inquiry hits; about 10% fee from proceeds; higher interest rate after promo period
    • Note: 0%-interest promotional credit cards are available - but may accrue interest - and normally charge double-digit interest on balance after 0% term

  • Participation (discounted equity purchases after completely paid off)

  • Mezzanine (lender can convert to an equity interest in case of default, subordinate to senior lenders; higher interest rate)

  • Convertible Note (considered an equity play)

  • Syndicated Loan (combines sources to reduce risk,or for very large loans)

  • Hard Money (based on asset value versus individual credit score; short term; higher interest rate)

  • CrowdFinance (many, often small, contributors, generally through an online portal)
    • Debt or Equity - equity portals require SEC registration
    • Donation or pre-purchase of products or services

  • Contact Us for creative combinations to accomplish 100% financing

"We Consult on ALL these options, and Structure, help Prepare then Deliver to the BEST Financial Resources."


Other Sources

  • Suppliers (who profit from your existence or growth)

  • Customers
    • Give a discount for a year for upfront cash
    • Commit to a subscription model for a year
    • Government contract with big payment up front

  • Grants (Government, Veteran Benefit, Non-Profit, ...)

  • Sponsorships (for sponsors' exposure on buildings/vehicles/marketing/websites, at events, ...)

  • Government Programs that fit into local/national leadership agendas

  • Owner Carry
    • Seller finances the Buyer
    • 1-2 years to launch project or business
    • Longer if mutually beneficial
    • The note can be sold for the lump sum Seller may need or prefer

  • Loan Assumptions

  • Public Offerings - Initial and Subsequent

Costs - approximate

  • Interest
    • Fed Rate + 3% or more (currently 8% - 15%)
    • Higher for "hard-money" and high-risk loans
    • Possible adjustment proportional to the Loan-to-Value (LTV) Ratio and Duration
    • Possible buy down with added points (paid by borrower or seller, mainly for cash flow and taxes, since the IRR over 5 years is about 1% reducing 7% interest down 0.25% at a cost of 1 point; about 2% IRR at 10 years; includes additional pricipal reduction)

  • Fees - not all levied
    • Initiation/Consulting - 1-3%, if needed, minimum $2000
    • Origination - 1-3%
    • Bank Participation (SBA) - 0.5%
    • Total - 1-7%
    • Obtain estimate as early as possible
    • Possible negotiation based on volume and intermediaries

  • Pass-Throughs
    • Business Credit Report
    • Verifications
    • Appraisal
    • Survey
    • Title
    • Recording
    • Inspection
    • Travel
    • Permits
    • Legal - 0.05%, minimum $2000
    • Environmental Site Assessments
    • Negotiated Code/Habitability Maintenance

  • At Closing
    • Down Payment
    • Property Taxes
    • Prorated Interest
    • Liens
    • Balance of Current Loan(s)
    • 6-12 months of interst (high-risk loans)

Loan-to-Value (LTV) and Loan-to-Cost (LTC) - approximate

  • Normal
    • 50% - 80%
    • Based on current or after-updated / repair / rehab value

  • Government
    • Up to 90%
    • SBA, HUD/FHA

  • Refinance
    • Up to 100%
    • Conventional, Private, Government
Duration (Term)
  • Interest-only or Construction, up to 2 years

  • 5-25 years, though may amortize for longer
Buying Businesses
  • Set up Lenders in advance based on the collateral to be acquired

  • Be their salesman or consultant for equity and subsistence compensation until you own the company
    • Start implementing your growth policies in advance
    • You'll also learn quickly if you want the company

  • Other options
    • Owner Carry
    • Profit Participation

  • Build relationship so Seller wants you at the helm, not an impersonal Buyer from a different region or culture

  • Preparation
    • Coordinate clearly with key employees
    • Seller could finance equipment, real estate, cash-flow, etc to maximum - loans assumed on purchase

Submittal Requirements - not all requested by each Source - We Sequence, Streamline and Optimize Applications

  • Project

    • Name
    • Powerful Description (one paragraph, include remainder)
      –––––– optionals and possible additions follow ––––––
    • Location
    • Govt Approvals (permits, planning commission, etc)
    • Franchise (disclosure documents)

  • Request

    • Purpose (acquisition - full/partial, refinance, cash out; asset, business)
    • Amount (us$)
    • Down Payment (us$, max)
    • APR (maximum / best available; fixed or floating)
    • Minimum LTV (or LTC)
      –––––– optionals and possible additions follow ––––––
    • Other Lenders in play (such as current bank)
    • Other lenders turned down by Client or Lender
    • Owner carry (% range; agreement)
    • Company Name (with Inc, Ltd, Sub-S, LLC, Partnership, etc; registration state)
    • Term (years)
    • Use of Funds (RE, technology upgrades, construction costs, equipment, cash out etc; schedule, by year)

    Make sure all documents are signed (as appropriate)

  • Business Documents (attachment or online link)

    • Overview (condensed Executive Summary - Mission, Market, Mgt Team, Money - financial projections) Reviewed, No Charge/Obligation
      –––––– optionals and possible additions follow ––––––
    • Executive Summary (condensed Business Plan)
    • Pitch Deck (PPT or PDF with video or script; 10 slides of Executive Summary, to be presented in 20 minutes, in 30-point type)
    • Business Plan
    • Private Placement Memorandum (for Equity only, based on Business Plan)

  • Financials (entry, attachment or online link)

    • Profit and Loss statement (2024 YTD; if 2023 tax returns not filed, 2023 P&L; YTD and P&L certified by licensed accountant)
    • Balance Sheet (<90 days old, better <30 days)
    • Debt Schedule (business; current)
    • Financial Projections (_____ years, minimum 3, if not in Overview)
      –––––– optionals and possible additions follow ––––––
    • Sales Tax Rates (if any sales income)
    • Bank (checking, savings, retirement)
    • Tenant financial statements (single-tenant properties)
    • Invested to date (us$M)
    • Planning to invest in future (us$M)
    • Income (last 2-3 years; business and personal with 20%+ interest)
    • Tax Returns (last 2-3 years; business and personal with 20%+ interest)
    • Operating statements (3 years)
    • Check DSCR (NOI / Debt Service; minimum 1.2 to be safe)

  • Sponsor (duplicate for each individual or entity with 20%+ interest)

    • Full Name (with title in company)
    • Credit Rating (personal/business; source; actual/estimate)
    • Bio/Resume (for new ventures)
    • Service Address (if not in Bio/Resume; rent or own)
    • Citizenship
      –––––– optionals and possible additions follow ––––––
    • IRS Issues
    • Mortgage Lates
    • Felony Convictions
    • Last IRS filing (year; filed regularly)
    • Other Investment / Rental Properties / Assets
    • Liquidity (us$ or % immediately available, to be verified by Bank Statements)
    • Industry background (properties/businesses owned/managed, etc.)
    • Foreclosures, bankruptcies, criminal issues (explanation)
    • Net Worth (us$M)
    • Corporate Tax ID
    • Passport
    • Accept recourse (full or partial)
    • We Sequence, Streamline and Optimize Applications

  • Collateral (duplicate for each; make entry, attachment or online link)

    • Type (RE, vehicle, equipment, patent, precious metals, gems)
    • Other Collateral (for down payment, increase LTV or reduce interest; Type, Location, Value)
    • Address (include county)
    • Estimated value (source; appraisal)
    • Year (built, last renovated)
    • Size (square feet / units)
      –––––– optionals and possible additions follow ––––––
    • Purchase price
    • Date of purchase
    • Mortgage/Lien balances (statements and amortization schedules)
    • Seasoning complete (if not, date)
    • Pictures (number to sequence)
    • Insurance policies (fire, theft, flood, loss, liability, etc)
    • Other information (enhance value, clarifications)

  • Real-Estate-Specific Collateral (personal, commercial)

    • New Purchase (LOI, Agreement, Contract)
    • Zoning (Residential, Commercial, Mixed, Other - specify)
    • Owner occupied (%)
    • Occupancy (total %)
    • Tenants (individuals, business & type, government subsidized, etc)
    • Total Income (rents, vending, etc; annual)
    • Total Expenses (taxes, insurance, maintenance, utilities, management, maintenance reserve, etc; annual)
    • Net Operating Income (NOI - Income less Expenses; annual)
      –––––– optionals and possible additions follow ––––––
    • Rent Roll (if tenant occupied; include extension/termination options, rent steps)
    • Taxes (annual)
    • Insurances (annual)
    • Owners' Association (annual)
    • Rent to Family Members (%)
    • Historical occupancy (3 years)
    • Historical sales per square foot (retail properties, 3 years)

  • Startups (if in business for less than 12 months; special category and documentation requirements)

    • Business Type (real estate, technology, product, etc)
    • Business Documents (see Documentation above)
    • Location (virtual, home, office, facility; base address)
    • Initial Funding (LOCs, credit cards, 2nd mortgages, F&F, suppliers, customers, associates, notes, seed, etc)
    • Legal Structure (sole, partnership, LLC, Sub-S, C-Corp, non-profit)
    • Trade Name
    • Govt Approvals (zoning, permits/registrations/licenses)
    • Patents (submitted, approved)
      –––––– optionals and possible additions follow ––––––
    • Initial Costs (inventory, deposits, equipment, real estate, office setup, accounting, hiring, etc)
    • Business Costs (space, marketing, total payroll, prof services, insurances, vehicle, maintenances, travel, etc)
    • Payroll Registrations (W2, 1099, work comp, disability; local, state, fed)
    • Payroll Compliance (employees, independent contractors)
    • Insurances (officers, fire, vehicle, liability, etc)
    • Accounting System (method, software)
    • Tax Identification
    • Personal Income Requirements (years 1, 2, 3-5)
    • Professionals (attorney, accountant, bookkeeper, consultants)
    • Groups (LinkedIn, Facebook, Meetup, clubs, chambers)


PROSPER SYSTEMS, LLC (.biz)Kenton H Johnson (.com), Founding Member • COMPLIMENTARY Overview Review


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Copyright © 2018-2024, Prosper Systems LLC, Denver CO USA. All rights reserved. Latest update, 3/20/2024, KHJ