|
Not all business or investment properties are doing well. These troubled properties may be in a transition period of reversing a declining trend or struggling to remove stifling tax liens or judgments.
Troubled properties are denied access to conventional debt financing because of the nature of the liens against the property. For example, if the property has any federal tax liens because of the past actions, conventional financing is not available. Conventional lenders generally view a property with tax liens as one that cannot sustain itself or is controlled by an entity that is not responsible. The Equity Companies view these dilemmas somewhat differently.
Troubled properties require temporary financing that will pay off the liens. Many of these businesses look to their equity buildup in the property or equipment as a source of capital.
The Road to Stability is Paved with Good Financing
To give troubled properties a chance to prove themselves, the Bridge-to-Stability™ product was introduced. This product ignores the past and concentrates on determining if the reason for the liens or loan defaults has been resolved. If the investment property or business property now needs to eliminate current debt holders or liens, this loan product acts as a temporary bridge to better financing.
These interest-only loans are usually for six months to three years and are twice as expensive as bank financing and half the cost of venture capital. It is a product that serves the need of a larger number of business and investment property owners than one may think. The transactions are underwritten based primarily on the cash flow of the property. The value of the property is discounted significantly by this product to adjust for the risk inherent in providing capital to cure problems arising from past activities.
The Swift Solution for Clients in a Jam
There are some businesses that do not have sufficient equity in their properties or their need for funds is so time-sensitive that they are willing to pay a higher price for high-risk capital. CapitalAccess™ is a program of the Equity Companies designed to assist those clients who need it and need it now.
This program is very subjective in its underwriting. It evaluates the cause of the problem, the cash flow of the entity, the experience of the owner and the sales of the business. Even so, a decision and funding can be made five business days from the receipt of current profit and loss statements, balance sheet, sales tax receipts, credit card sales statements, personal financial statements and credit report. |
HOW EQUINET WORKS
