Finance Options, Prosper Systems, Kenton Johnson, Commercial, CRE, Tech, STEM

Sources • Specialties • Types • Other Sources • Costs • LTV/C • Duration • Buying Businesses • Submittal Requirements • More • Contact

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Finance Options - Debt and Equity
FREE EDUCATIONAL LIST

"We Consult on ALL these options, and Structure, help Prepare then Deliver to the BEST Financial Resources."
(We usually share points and fees with DEBT providers.) LUCRATIVE REFERRAL PROGRAM.

Start with our COMPLIMENTARY Overview Review

Sources

Conventional Banks
Government (SBA, HUD)
Community Banks
Credit Unions
Non-Bank Lenders
Alternative Lenders
Bridge Lenders
Local Family Offices
Insurance Companies
Pension Funds
Incubators
Community Collaboratives
High-Net-Worth / Private Individuals

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Specialties

Cash Flow Lenders
Equipment Lenders
Vehicle Lenders
Real Estate Lenders

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Types

Conventional (50%-80% 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).
EMERGENCY LOANS and GRANTS available NOW - see Emergency FINANCE Options page for DETAILS
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

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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

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Costs - approximate

Interest

3% - 12%
Up to 15% for "hard-money" and high-risk loans
Possible adjustment proportional to the Loan-to-Value (LTV) Ratio and Duration

Fees - not all levied

Initiation/Consulting - 2-6%, minimum $2000
Origination - 1-3%
Bank Participation (SBA) - 0.5%
Total - 0-6%
Obtain estimate as early as possible
Possible negotiation based on volume and intermediaries

Pass-Throughs

Business Credit Report
Verifications
Appraisals
Survey
Title
Recording
Inspection
Travel
Permits
Legal - 0.05%, minimum $2000
Negotiated Code/Habitability Maintenance

At Closing

Down Payment
Property Taxes
Prorated Interest
Liens
Balance of Current Loan(s)

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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

Asset-only, 1-2 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

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

Project
- Name
- Description (one paragraph, include remainder)
  –––––– optionals 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; fixed or floating)
- Owner carry (% range; agreement)
  –––––– optionals follow ––––––
- Term (years)
- Use of Funds (RE, construction costs, equipment, cash out etc; schedule, by year)
Business Documents (attachment or online link)
- Business Plan
- 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)
- Overview ("Brief"/"Teaser;" condensed Executive Summary) Reviewed, No Charge/Obligation
  –––––– optionals follow ––––––
- Private Placement Memorandum (for Equity only, based on Business Plan)
Financials (entry, attachment or online link)
- Profit and Loss statement (2020 YTD; if 2019 tax returns not filed, 2019 P&L)
- Balance Sheet (<90 days old)
- Debt Schedule (business; current)
- Financial Projections (3-10 years)
  –––––– optionals follow ––––––
- Sales Tax Rates (if any sales income)
- 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)
Sponsor (duplicate for each individual or entity with 20%+ interest)
- Full Name
- Credit Rating (personal/business; source; actual/estimate)
- Bio / Resume (for new ventures)
- Industry background (properties/businesses owned/managed, etc.)
  –––––– optionals follow ––––––
- Foreclosures, bankruptcies, criminal issues (explanation)
- Net Worth (us$M)
- Liquidity (% immediately available)
- Proof of Funds (for transaction costs, down payment; statement)
- Passport
- Accept recourse (full or partial)
Collateral (duplicate for each; make entry, attachment or online link)
- Type (RE, vehicle, equipment, patent, precious metals, gems)
- Address (include county)
- Estimated value (source; appraisal)
- Year (built, last renovated)
- Size (square feet/units)
  –––––– optionals 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 Collateral (personal, commercial)
- New Purchase (LOI, Agreement, Contract)
- Owner occupied (%)
- Tenants (individuals, business & type, government subsidized, etc)
- Rent Roll (if tenant occupied; include extension/termination options, rent steps)
- Annual Income (rents, vending, etc)
- Expenses (taxes, insurance, maintenance, utilities, management, etc)
  –––––– optionals follow ––––––
- Historical occupancy (3 years)
- Historical sales per square foot (retail properties, 3 years)
- Annual NOI (Annual Income less Expenses)
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 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 (W-2, 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)

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More

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

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