If you're an investor, or work with those in the investment and commercial arena, you've probably felt quite limited in financing opportunities as of late. To say that lending institutions have "clamped down" on the availability and opportunity for this type of lending, is an understatement to say the least. Finding and obtaining an old-fashioned strict investment loan is near impossible for many in or thinking of entering this market.
For those that have found the above true and find that their banks or lending institution will not finance or refinance a property they hold due to its latest/lower property appraisal, present inadequate income, credit shortcomings, or etc., there may be a solution. There is a newer Asset-Based Loan product that might provide the assistance they desperately seek.
This Asset-Based product also addresses the problems of the borrower that holds significant assets, but suffers from declining income status. Those borrowers that are looking to create cash-flow from equities, while not wanting to sell or liquidate the securities they hold, should investigate and consider this loan, as well.
This loan product has many attractive and beneficial features for investors. But, just what are the finer points of this Asset-Based loan?
Consider the following:
- No real estate is involved. Therefore, there are no appraisal concerns.
- For qualification purposes, there are no credit or income considerations.
- The collateral for this loan is securities owned and pledged by the borrower.
- The definition of an "Eligible Security" is: All publicly traded stocks, bonds, certain mutual funds, unit investment trusts, and real estate investment trusts.
- The Maximum Loan-to-Values are: 35% to 80%, depending on the liquidity and activity of the security.
- The interest rates and terms are attractive with Fixed Rates ranging from 3% to 5.5%, interest only payments, paid quarterly.
- This loan is Non-Recourse, meaning that the lender cannot sue for any other personal or real estate assets of the borrower in the event that they default.
With present market conditions presenting increased lending challenges, these Asset-Based Loans can provide the financial flexibility and options that many investors are presently lacking.
For more complete information regarding this product, and for an analysis of your individual scenario, please contact me. Together we will discover whether this product can provide the financial muscle and opportunities for your investments that you need.
Gene Mundt, Professional Mortgage Banker www.genemundt.com Chicago Bancorp