Asset-Backed Financing
Many businesses after years of success find themselves asset rich, but cash poor. Bancor Group can help you maintain your assets and open up pathways to cash without becoming over-leveraged. Answer a few questions about your business and let’s start a conversation.
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Real Estate Loans
Put Properties to Work for You
Commercial Real Estate can fund high-value purchase orders, back lines of credit and even provide a bridge to owning new property and expanding investment holdings. When you draw funds on a property, the lender places a lien on your asset that lasts until the terms of the loan are fulfilled.
Equipment Loans
Stay competitive with the latest technology
Equipment loans are one of the easiest asset-based loan for which you can be approved. The reason? The equipment you purchase stands as the collateral for the loan. That keeps you from risking other assets when you need to purchase equipment. Lenders will look for a clear justification of business need to show the equipment will help you generate cash.
Sale-Leaseback
Access cash and retain use with a reasonable leasing fee
Sale leasebacks can be used with buildings, land, and equipment to increase liquidity on the books. You will sell the asset to the buyer, simultaneously signing a lease agreement for an established term to retain use of the asset at a specified lease fee. The new owner takes over repairs of the asset, reducing your operational budget for repairs.
Secured Line of Credit
Reduce costs of revolving credit with a secured line
A business line of credit is one of the most sought-after financial tools in the business world. With generous credit limits and lower interest compared to business credit cards, a secured line is a great way for businesses to manage day-to-day costs, purchase materials, and even meet payroll.
Rehab Loan
Force Appreciation, draw customers and fill units with attractive amenities.
Rehabilitation loans are a specific type of asset-based loan. Built off of the estimated future value of property following completion of repair, redevelopment or upgrade, rehabilitation loans help you get the most out of commercial real estate. Increase the value of rentals or bring an aging property in line with market values before taking it to market.
Fix and Flip Funding
Buy, style, renovate and sell!
Fix and flip funding is a type of asset-based loan built around the speed of your project and the estimated value at market after you bring the style and mechanical systems up to date. These loans can also help you add sustainable energy saving features such as efficient appliances, solar and more.
Advantages
Asset-backed lending gives your business buying power that would otherwise be locked up in the assets you’ve acquired.
Access funds quickly based on the value of existing assets
Reduce risk to lenders and gain the benefit of best in class interest rates
Increase liquidity to improve debt coverage ratios
Apply funds to revenue-generating activities
These are but some of the applications of asset-based loans. Start a conversation with Bancor Group and we will help you identify the right loan to meet your funding objectives.
There is always more to learn.
What is a debt service coverage ratio?
Debt service is the relationship between either current assets and current debt or cash flow and long-term debt. In either case, lenders are seeking to understand your ability to cover your financial responsibilities. The outcome of those metrics can determine your eligibility for other types of funding. A good balance between debt and equity can open the door to new opportunities.
How do I determine the value of an asset for the purpose of borrowing?
An independent agency will help to determine the value of your asset. In the case of new equipment, the price is established in the market and lenders evaluate if they want to loan against the asset. With property, land and other valuables, the asset is evaluated against similar assets to determine what the market will bear. Lenders often provide a percentage of that estimated value.
What does it mean to be “upside-down” on an asset-based loan?
If the value of the property suddenly drops below the loan amount taken, the borrower is considered to be “upside-down” on the loan. Should the borrower default, they may owe more money than the asset is worth, putting them in a difficult situation. “non-recourse” asset-based loans help in this situation, because they give borrowers protection. So long as they remain current on payments, they will never pay more than the value of the loan. If they default, borrowers cannot seize other assets or seek additional funds from the borrower.
Do I need to make a down payment?
The majority of lending firms will ask for a 20% to 25% down payment for a real estate loan. However, the SBA gives eligible companies the option to provide a 10% down payment. And, of course, the larger your down payment, the lower your potential interest rates and the stronger your application.
Here's How To Get Started
Complete a Short Questionnaire
The information you provide will help us begin creating a plan for where you want to go. As we learn more about you, we’ll customize and adapt our solutions for your true needs.
Have an In-Depth Conversation with our Team
After reviewing the information, we’ll set up a conversation to understand your business more thoroughly. With the full picture of you and your business, we will work with our network to generate offers and showcase the best solutions to you.
Submit an Application
Our team will answer any questions you may have to this point. When you are content with the answers and information, we’ll help navigate you through the loan application process. Take Advantage of Continual Support. Things change. We get it. Our lending professionals and brokers will stand by to provide further advice or answer questions as needed, even after the initial application is complete.
What is the working capital ratio?
If you don’t have enough money to pay employees and keep the lights on, then the value of your long-term assets matters very little. That money, used for almost all daily expenses is referred to as working capital. Most businesses try to maintain a working capital ratio between 1.5 and 2.0. If you’re not sure what your ratio is, simply divide your firm’s annual liquid assets by its annual short-term expenses. The result is your working capital ratio.
Is working capital financing right for my firm?
If you are looking to make a large investment or a long-term purchase, it is usually better to focus on certain tools (like a real-estate loan). Working capital loans are usually better for short-term situations and boosting operational cash. If you are not in a rush for funds, other financing tools may be better for you, as working capital financing often comes with higher interest rates.
Will a factor impact my client relationships?
While not all factors interact with your clients in the same way, most clients won’t notice when you use a factor. In most situations, a simple notice of where to send payment is the only contact the client receives.
Are Hard Money Loans a safe option?
When you work with our network, you can rest assured that each lender has been thoroughly vetted, is licensed, and bears a reputation for integrity. All of our partners adhere to local and national laws and policies and meet established standards for credibility and trustworthiness. Additionally, if a Hard Money Loan is not the right tool for your business, our partners will tell you upfront and help you find a more appropriate financial solution. We are transparent with our terms and conditions and will answer any questions your team has. We want your business to feel safe and comfortable in its decision to work with us.