A UCC filing is almost like a mortgage against your business. The UCC’s will be seen by other lenders who you apply with in the future. When obtaining lines of credit make sure you find out if the lender will take a UCC against your business or not. This is not necessarily something that should always be avoided but it is something that should be planned and part of a strategy so that you allow the right lenders to utilize UCC’s when they are required by the lender. Technically, a loan or line of credit that requires a UCC from the lender is not “unsecured.”
Think about it like this. Almost all wealthy individuals, and many who have plans to build wealth, hire financial planners. What do financial planners do? They manage assets. One of the most common problems that business owners face is not in managing their assets but in managing their debts. The more wealthy people have the more debt they have and in order for any business to grow, they must have access to capital (aka Cash). Access to capital means creating more debt and properly creating that debt as well as properly managing that debt requires strategies and tactics that most business owners are not trained and equipped employ. Ask yourself if you have the training and experience to manage debt effectively using the very best strategies that are available on the market today – we’ve been doing this for years and it’s all we do, and we are constantly learning each and every day.
You’ve really got 2 options.
Your first option is that you could hire BFS, Inc. We submit hundreds of business loan applications and business credit applications to several different lenders every month. We know which lenders are lending and whether you and your business will be a good fit for them and we also know how to make sure you have the correct business credit application and credit profile before you submit those applications.
Your second option is you can try to do it on your own.
For each individual, you can raise between $5,000 – $1,000,000,000 and higher. In our program, it’s common for people to get between $40,000 – $60,000 within the first 30 days. We’ve had some clients get approved for as much as $150,000 or more within 15-30 days but $40,000 – $60,000 is more normal. Although it may not all come in the first 30 days, if BFS, Inc. accepts you as a client meet all qualifications, we may be able to guarantee you a minimum of $5,000 and up.
Since there’s no collateral what happens if I default or stop making payments? Unsecured credit lines are obviously unsecured but just remember, there’s still a PG (personal guarantor) who signs for the repayment of the loan. If you default on a mortgage or a car loan, there is obvious collateral attached to the loan that protects the lender. With unsecured credit, you must keep in mind that if you default or stop making payments that the lenders will still do whatever they can to collect their money. So, don’t confuse unsecured with non-recourse.
A good PAYDEX score… is a good thing to have… and we suggest that all business owners purposely go after an excellent D&B report. Sometimes the PAYDEX score and D&B profile can be important when going after certain types of unsecured business lines of credit. However, there are other times when it’s completely a non-issue.
Unsecured credit lines are not typically rate-driven products like mortgages and other long-term forms of financing. Hopefully that goes without saying but, just in case, be sure to keep in mind that unsecured business lines of credit are NOT designed or intended to be used as long-term products like mortgages and nor are they intended to be specific to any one deal, purpose, or instrument like car loans, student loans, and other installment loans. Unsecured business credit, unlike these other forms of financing, can be used over and over and over again for many different reasons and purposes. Although any good thing can be set up poorly and you should ALWAYS know what the rates and terms it’s safe to say that you don’t shop rates on unsecured business lines of credit like you do for mortgages. It’s not that the rates are not important, but they almost never make or break a deal. At the end of the day, the best approvals go to businesses that provide full income documentation (tax returns), have very good credit scores, good liquidity, and appear to be the lowest risk to the lender.
If your business has sales, it can qualify. The higher the sales, the more your business can qualify for. In general, the business should have at least $10,000 to $15,000 in deposits per month and make at least 5 deposits per month or gross an average of at least $120,000 a year.
The higher the average daily balance is, the higher an approval will be for. A business that deposits $10,000 per month into the account and keeps an average daily balance of $25,000 will qualify for significantly more than a business that deposits $10,000 per month but only has an average daily balance of $1,000.
Terms vary, and in most cases are 2, 3, 6, 9, 12, and 18 months.
For this loan, at least 51% of the ownership has to apply. In your case, 2 of the 3 owners would need to apply.
This product is not approved just in the name of the Corporation. The owners are on the application and then sign on the closing paperwork.
For this loan, at least 51% of the ownership has to apply. In your case, 2 of the 3 owners would need to apply.
This product is not approved just in the name of the Corporation.
The owners are on the application and then sign on the closing paperwork.
The business credit is looked at, but it is only a small part of what is looked at that is considered. The business credit score can be somewhat low, and it will not affect the decision or approval significantly in most cases. The business credit has to be significantly deteriorated in order for it to have a significant effect on the decision, or even turn what would be an approval into a decline.
In most cases, funding can be obtained within 4 weeks or less.
Once you are given the stipulations from the underwriters and you can provide everything back in a timely manner than funding can take place in as quick as 7 to 10 business days.
Yes. In most situations, BFS, Inc. does collect your financials for verification.
Unsecured business credit lines are great to use for debt management, working capital, startup funding, and almost anything that is not a long-term project. It’s important to understand that, as a rule of thumb, a long-term project is anything over 12-18 months…but this is not true for all situation.
It’s a good rule of thumb. However, it also depends on whether you’re utilizing a traditional, bank-draft unsecured business credit line or the credit card model as to the best strategy to employ.
Absolutely.
The properly utilized business credit cards will often cost you less in interest expenses than traditional unsecured credit lines if they are managed properly.
Because of this, and because of the growing difficulty in getting traditional, bank-draft unsecured business credit from banks, many business owners are turning to
using business credit cards as their primary unsecured business lines of credit. Some, unfortunately turning to the wrong sources.
Yes, your business can use the business bank statement loan over and over, just like a line of credit.
In fact, once the line is paid down 60%, your business can draw the remaining credit line, and use it again for its working capital needs.
Absolutely. In fact, many of our clients are owners of new or start-up firms or investors who use the funds for investment purposes.
Yes, if your financial statements are strong, please provide your most recent year’s Profit and Loss statement or the prior year’s business return.
Strong financial statements are statements which have good Gross Sales and net income of $120,000 per year or higher. In addition, if the average balance or average total deposits of your most recent 6 or 12 months business checking account statements is higher than the average balance or average total deposits for just the most recent 3 months, then provide 6 or 12 months. The approval obtained may be higher by doing so.
Very likely. In most cases, line size limits are increased significantly just based on repayment.
If your business has increased cash flow during the term of the repayment, line size increases can be dramatic, as much as 100% or more.
A professional employer organization (PEO) is a firm that provides a service under which an employer can outsource employee management tasks, such as employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development.
Businesses usually take out loans to meet various cash flow needs of companies, for example, meeting payroll or building inventory. When a company cannot show that it can pay for a loan through its cash flows, the lender may decide to approve the loan based on the value of the entity’s assets. This form of business financing is referred to as asset-based lending.
Asset-based lending occurs when a loan is granted to a firm solely on the value of assets pledged as collateral. The terms and conditions of an asset-based loan depend on the type and value of assets offered as security to the lender. Lenders usually prefer highly liquid securities that can readily be converted to cash in situations where the borrower defaults on its payments.
In general, the more liquid the pledged asset, the higher the loan-to-value ratio. In addition, loans that are granted under asset-based financing are never the full value of the assets pledged.
For example, say a company seeks $200,000 in a loan to expand its business operations.
If the company decides to pledge its highly liquid marketable securities on its balance sheet as collateral, the lender may grant 85% of the face value of these assets.
This means that if the firm’s marketable securities are valued at $200,000, the lender will be willing to loan $170,000. If the company, however, chooses to pledge less liquid assets such as real estate, finished inventory, or equipment, it may be only to secure only, say 50% of its required financing.
Interest rates on these loans, as you can imagine, are less than interest rates on an unsecured loan or line of credit because if the borrower defaults, the lender has the ability to seize assets and sell them in an attempt to recoup its lending costs. The lender’s interest is secured by the assets of the borrower which also determines how large of a loan a company can access. The interest charged on an asset-based loan is determined by the size of the loan, and ranges from 7% to 17%, expressed as an annual percentage rate (APR).
Companies go through the route of asset-based lending for a number of reasons. The cost of issuing shares or bonds in the capital markets may be too high. A firm may also not be able to raise capital through the securities market if it needs immediate funding for a time-sensitive project such as a merger, acquisition, inventory purchase, etc. Also, if getting unsecured financing proves to be challenging, a business may opt for asset-based lending. Companies that take asset-based loans usually have cash flow problems that stem from rapid growth. Small and mid-sized companies that are stable and that have assets to be financed are common asset-based borrowers.
The assets used in asset-based lending are not normally pledged as securities for other loans. If they are pledged to another lender, the other lender must agree to subordinate its position.
A cash-out refinance is a mortgage refinancing option where the new mortgage is for a larger amount than the existing loan to convert home equity into cash.
In the real estate world, refinancing is the process of replacing an existing mortgage with a new one that typically extends to the borrower more favorable terms. By refinancing, the borrower may be able to decrease their monthly mortgage payments, negotiate a lower interest rate, renegotiate the number of years – or term – of the loan, remove additional borrowers from the loan obligation, or access cash through home equity built up over time.
Rate and Term Versus Cash-Out Refinancing
The most basic option in mortgage loan refinancing is the rate and term refinance. With this option, the borrower is attempting to attain a lower interest rate and/or adjust the term of the loan. If a property was purchased years ago, the borrower might find it advantageous to refinance in order to get today’s prevailing lower interest rates. Also, variables may have changed in a borrower’s life where a 15-year mortgage may better suit their needs in comparison to their current 30-year mortgage.
A cash-out refinance allows the borrower to convert home equity into cash by creating a new mortgage for a larger amount than the original. The borrower receives the difference of the two loans in cash. This is possible because the borrower only owes the original mortgage amount to the lending institution. The additional loan amount of the cash-out refinanced mortgage is paid to the borrower in cash at the closing.
Example of a Cash-Out Refinance
Here is an illustration of a cash-out refinance. An owner has a property which has a $200,000 mortgage against it and he/she still owes $100,000 on the mortgage. The owner has built up $100,000 in home equity. So that the owner could convert a portion of that equity into cash, they could opt for a cash-out refinance. If they wanted to convert $50,000 of their equity, they could refinance taking out a new loan worth a total of $150,000. The new mortgage would consist of the $100,000 remaining balance from the original loan plus the desired $50,000 that could be taken out in cash.
By calculating the property’s present loan-to-value ratio (LTV), a lender can establish a maximum loan amount for a cash-out refinance. The lender looks at the current market value of the property in comparison with the outstanding balance the borrower owes on the existing loan.
If we use the above example and assume that the current market value of the property is $250,000 and that the lender has set a maximum LTV of 80%, the maximum cash-out refinance amount would be $100,000. The 80% LTV would establish that the maximum amount of the new loan would be $200,000. After the initial mortgage is paid off ($100,000), there would be $100,000 in cash available to the borrower.
These types of loans are backed by the value of the property, not by the credit worthiness of the borrower. Since the property itself is used as the only protection against default by the borrower, hard money loans have lower loan-to-value (LTV) ratios than traditional loans.
Scenario for Hard Money Loans
Jack has a home and a rental property mortgage. He finds another property that will make good income.
He can’t qualify for another mortgage so he can acquire the new property. This is an option for him to have more revenue. He takes out a persona loan to take care of the down payment on hard money.
When purchasing a property with hard money, one options for funding is 70% to 85% of the loan to value (LTV).
Example:
If the home is selling for $50,000 but the as is value is $80,000 we can finance 70% to 85% of the $80,000.
When purchasing a property with hard money, another option for funding is 70% to 90% loan to cost (LTC). Example: they are selling a house at $50,000 and it needs
$10,000 in repairs we can finance 70% to 90% of the $60,000. This is the loan to cost (LTC)
When purchasing a property with hard money, another option for funding is 70% to 85% after repair value (ARV). Example: they are selling a house at $50,000 and has $10,000 in repairs.
The after-repair value (ARV) on the house is $120,000.
The funding will be based on the $120,000 because it’s the value of the property after repairs are completed.
Merger: In a merger, the boards of directors for two companies approve the combination and seek shareholders’ approval. After the merger, the acquired company ceases to exist and becomes part of the acquiring company. For example, a merger deal occurred between Digital Computers and Compaq whereby Compaq absorbed Digital Computers.
Acquisition: In a simple acquisition, the acquiring company obtains the majority stake in the acquired firm, which does not change its name or legal structure.
Consolidation: A consolidation creates a new company. Stockholders of both companies must approve the consolidation, and subsequent to the approval, they receive common equity shares in the new firm.
A tax credit is an amount of money that taxpayers can subtract from taxes owed to their government. The value of a tax credit depends on the nature of the credit; certain types of tax credits are granted to individuals or businesses in specific locations, classifications or industries. Unlike deductions and exemptions, which reduce the amount of taxable income, tax credits reduce the actual amount of tax owed.
TAX BREAKS
IRS PUBLICATION 514
Tax Credit
Governments may grant a tax credit to promote a specific behavior, such as replacing older appliances with more efficient ones, or to help disadvantaged taxpayers by reducing the total cost of housing.? Tax credits are more favorable than tax deductions or exemptions because tax credits reduce tax liability dollar for dollar. While a deduction or exemption still reduces the final tax liability, they only do so within an individual’s marginal tax rate. For example, an individual in a 15% tax bracket would save $0.15 for every marginal tax dollar deducted. However, a credit would reduce the tax liability by the full $1.
Nonrefundable Tax Credits.
Non-refundable tax credits are items directly deducted from the tax liability until the tax liability equals $0. Any excess nonrefundable tax credit is not utilized (by giving the taxpayer a refund, for example), as any amount that would potentially reduce the tax liability further is not paid out. Nonrefundable tax credits negatively impact low-income taxpayers, as they are often unable to use the entire amount of the credit. Nonrefundable tax credits are valid in the year of reporting only, expire after the return is filed, and may not be carried over to future years. As of 2017, specific examples of nonrefundable tax credits include benefits for adoption, raising children, earning foreign income and paying mortgage interest.
Refundable Tax Credits
Refundable tax credits are the most beneficial credit, as they are entirely refundable. This indicates that, regardless of a taxpayer’s income or tax liability, he is entitled to the entire amount of the credit. This is true even if the refundable tax credit reduces the tax liability below $0. In that situation, the taxpayer is due a refund.
Last year was probably the most popular refundable tax credit is the Earned Income Tax Credit (EITC).
Other refundable tax credits are available for education, health care coverage and for raising children.
Partially Refundable Tax Credits
Some tax credits are partially refundable, which can both decrease taxable income and lower tax liability. An example of a partially refundable tax credit is the American Opportunity Tax Credit, which remains in place from 2018 on under the new tax legislation. If a taxpayer reduces his tax liability to $0 before using the entire portion of the $2,500 tax deduction, the remainder may be taken as a refundable credit up to the lesser of 40% of the credit or $1,000.
Transactional Funding (Commercial and Residential)
This is funding that is broken down into three parts. Let’s use A, B, C;
A-The seller of the property,
B-Investor of the property, and
C-Backend buyer (final owner of the home)
Scenario of Transactional Funding
The house sells for 60,000.
Get a contract on the house for 60,000 purchased the home from (B) for 200,000
B goes to the transactional funder because they have a contract with both A and C (because you can show C
as being a pre-approved back-end buyer for the amount that the house is being purchased for.
After obtaining an estimate for construction/rehab of 45,000, (B) Must submit the contract with (a),
(B) Must submit the contract with (C), and then C- again has to show that he is an approved back-end buyer
for the amount of money, the house is being purchased for.
Knowledge applied is power-always!
We can show you how to flip houses and it becomes a supplement to your current income, make it your full-time job, replacing your income, and how to create positive cash flow that will lead to the development of your legacy.
The most unique aspect of Team Tangible is the fact that it was developed and produced by a great financial institution, Blanks Financial Solutions.
Blanks Financial Solutions is a company that provides complete customized financial solutions for their clients, which makes the development of Team Tangible a rising star in the industry.
Team Tangible has programs designed to help the traditional home owner as well as the investor by providing more options, and real estate strategies that a regular financial institution simply can’t offer.
Example:
You are approved at your financial institution for a home loan and your dreams are just about to come true. You are new to the process, and this will be your first purchase. You know you make a decent salary, and you have saved some money, so you think you are all set.
The loan officer advises you that all you need now is your down payment and your closing costs. You ask how much are they?
I have some saving’s, that should cover it. The loan officer says your down payment is usually 20% of the total home purchase price. The closing costs are about 3.5%, and it’s a buyer’s market, so homeowners aren’t taking care of those costs anymore. Also, inspection of the home is an additional cost.
Financial Institution- Provides a loan to cover your mortgage
Team Tangible
Provides a loan to cover your mortgage, your down payment, your closing costs, your inspection, the new living room furniture you saw last week, and that flat screen TV for your man cave.
This is purchasing a property and without spending any money rehabbing the property, it is resold to another entity for a profit. There are two ways to purchase this type of property. Either you can utilize a personal or business line of credit, or you can use any available funds. An example of how to purchase a wholesale home is listed below:
Scenario for Wholesale Purchase/Foreclosure
1. Find a home that’s worth $50,000
2. The home needs a lot of work, so you are able to purchase it at a lower amount ($10,000)
3. You put no money into the rehab
You bought the house for $10,000.
You don’t spend any additional money on the home. Now you want to sell the home for a profit.
You list the home for sale, and increase the selling price to $20,000.
The difference of what you bought the property for and what you sold the home for is your profit.
You have a $10,000 profit on this property.
Typically, you can put $5,000 to $10,000 on top of your purchase price to leave room for your investor to make money. Any amount over what you originally purchased the home for is profit.
Since this is short-term financing, to begin with, the vast majority of customers do not have the interest to pay off early since the repayment is 6 months or
less in many cases.
If early payoff does occur, early payoff advantages are limited since the repayment term is limited, to begin with.
Since the approval amounts are based on the cash flow, several factors are considered as part of the approval, including the average daily balance and the consistency of the cash flow.
Based on these factors and an analysis of your cash flow, only an amount your business can handle is approved.
Yes. One advantage of this business bank statement loans program is that you do not need to take the full amount approved.
Your business can begin with a lower amount that it feels very comfortable with. Once you repay that, you can go up to a higher amount.
When properly set up, unsecured business lines of credit do not report to your personal credit report unless you go into a default status.
Great credit is a good thing. And it will help you in everything you do as a business owner. But good credit alone does not get you across the finish line. It’s really just the beginning.
There are many other necessary elements to understand. The right lender needs to be identified, the goal you’re wanting to accomplish, what type of unsecured business credit line is best for your situation, what your company will actually be able to obtain, etc. these are some of the items that must be identified if you wish to obtain unsecured business credit.
Yes. However, be sure to do this the right way. We do not want anything to do with someone using a straw buyer scheme but if you have a legitimate person who is fully aware of the role they are playing with you as your credit partner then we can help you both to ensure that this is executed properly and compliantly.
Your credit partner needs your full authorization to borrow on behalf of the business and needs to go through our consultation and compliance phone call which verifies identity and confirms their full knowledge of their role.
This is a very good option when it is done correctly and that all parties are fully aware of their roles and that all lender applications are filled out completely and honestly. Ask us for more details if you would like to learn more about working with your Mom, Dad, sibling, Uncle Louie, or any other friend or partner as a credit partner.
Team Tangible provides cash flowing businesses which are tangible because they have 3-5 years of actual financials, employees, and management in place.
Team Tangible is a completely unique and forward moving ideology that will create tremendous opportunity for individuals or families that are ready to take control of their destinies, have a willingness to secure their future, and ready to build a legacy for their families.
Knowledge applied is power-always!
We can show you how to flip houses and it becomes a supplement to your current income, make it your full-time job, replacing your income, and how to create positive cash flow that will lead to the development of your legacy.
The most unique aspect of Team Tangible is the fact that it was developed and produced by a great financial institution, Blanks Financial Solutions.
Blanks Financial Solutions is a company that provides complete customized financial solutions for their clients, which makes the development of Team Tangible a rising star in the industry.
Team Tangible has programs designed to help the traditional home owner as well as the investor by providing more options, and real estate strategies that a regular financial institution simply can’t offer.
Example:
You are approved at your financial institution for a home loan and your dreams are just about to come true. You are new to the process, and this will be your first purchase. You know you make a decent salary, and you have saved some money, so you think you are all set.
The loan officer advises you that all you need now is your down payment and your closing costs. You ask how much are they?
I have some saving’s, that should cover it. The loan officer says your down payment is usually 20% of the total home purchase price. The closing costs are about 3.5%, and it’s a buyer’s market, so homeowners aren’t taking care of those costs anymore. Also, inspection of the home is an additional cost.
Financial Institution- Provides a loan to cover your mortgage
Team Tangible
Provides a loan to cover your mortgage, your down payment, your closing costs, your inspection, the new living room furniture you saw last week, and that flat screen TV for your man cave.
There are many ways in order to purchase a home through our program with Team Tangible! Listed below are the different avenues that can be taken in order to make your home purchase a reality.
Cash on hand refers to any money that you may have saved, inherited, or possibly any money that has come from a private investor. Transactional Funding is a specified type of loan that will be defined more in detail later in this guide.
A personal loan can be used for any purpose that you choose. The criteria for the personal loan is a minimum credit score requirement (from all three credit agencies) is 680 or better. The other option is that you may also take out a business loan that has different criteria but also based on your credit score as well as revenue that is generated from the business. There are several options available if this is the avenue you decide to take.
Either of these options will require a short form filled out to determine how we can assist in funding.
The charging of real (or personal) property by a debtor to a creditor as security for a debt (especially one incurred by the purchase of the property), on the condition that it shall be returned on payment of the debt within a certain period.
We offer traditional mortgages with requirements that can’t be beat!
All programs we offer for mortgages have a minimum credit score of 500!
We can provide mortgages in all 50 states with a low 500 credit score requirement OR
100% Finance Program (ONLY for Colorado, Texas, Nevada, California, Hawaii, Georgia and Florida)
There are two ways to qualify for this program that is $0 down payment, and $0 closing costs (further explanation required) Fall within the median income of the county that you are wanting to purchase your home within. This is a grant program.
If you don’t qualify for the average median income, there is still the opportunity for $0 down and $0 closing costs (further explanation required) Scenario for Mortgages (Residential)
Carl has decided he wants a home for his family. He understands that depending on his credit score his interest rate may vary. He came to BFS as he knew what the bank offered, and he wanted to get approved for a larger home. He heard from a friend about the 100% financing program that they have in Texas, and wanted to know what they could do. After speaking with our financial experts, Carl is on his way to home ownership.
Earlier the words transactional funding was referenced in the guide. The definition is listed below, as well as an example of how transactional funding works.
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