Business Revenue Loan Test Module

Transcription

1 1) How would you explain to a client what a revenue based loan is? 2) What does a revenue based loan use for collateral? 3) What is a positive compensating factor? Give me 2 examples of positive compensating factors 4) What is the minimum length of time in business a company needs to qualify for a revenue based loan? a) 2 Months b) 6 Months c) 1 Year d) 2 Years 5) How would you explain what a NSF and returned check item is, how do they affect the approval process? 6) What is the maximum monthly NSF's a client can have when submitting to a tier 1 lender? a) 3 b) 1 c) 5 d) 8

2 7) What does the term "Seasoning" mean when it comes to bankruptcy? 8) Explain the difference between a ch:13 bankruptcy and a ch: 7? 9) Explain how business revenue lenders lend in percentages against a client s gross sales? What affects the percentages they might lend? 10) If a client has a 680 fico and clean bank statements what percentage of the monthly gross sales will they get in a loan approval? a) 20% b) 60% c) 95% d) 80% 11) Explain the difference between a tier 1 revenue lender and a tier 3 lender, what are the characteristics that separate them? 12) What documents do you need to submit a client for approval on a revenue based loan? 13) What is the rule for revenue based loans when it comes to paying off a 1st lien?

3 14) Having good credit card sales can get a client a larger loan when they have poor credit? 15) The longer the term the better the factor rate? 16) Explain what a sell rate is? 17) A client with only a personal bank account can get a revenue based loan? 18) What does "DBA" mean? 19) Explain how a tax lien affect the loan approval process, if someone has a tax lien what supplementary documentation do we need to get them approved? 20) What do IRS forms 4506T and form 8821 allow lenders to do? 21) Which of the following is not a final stipulation requested by a lender for funding? a) Landlord Call b) Funding Call c) Bank Verification d) Signed Loan Application

4 22) Explain what a site inspection is? 23) Explain what LexisNexis is and why our investors use it? 24) In general, the minimum monthly qualifying deposits for a client is which of the following? a) $5,000 b) $3,000 c) $10,000 d) $15,000 25) Explain the term "Inception Date" 26) We can fund sole proprietors with no EIN?

5 27) Industry type can affect term length? 28) If a client has 700 credit but 10 NSF's a month and poor cash management will they get 80% of their average monthly deposits in a loan? 29) Tier 1 investors will renew when the client has paid back what percentage of the loan? 30) Explain a credit card split loan? 31) Explain what a lock box loan is? 32) What is a Confession of Judgment? When would we typically see a lender request one? 33) Typically what percentage of the monthly deposits will a client get in a loan when doing a 2nd lien? 34) Explain what a judgment is and how it can affect a loan approval/funding? 35) Solve for daily payment using 21 business days Loan Amount - $55,000 Term - 7 months Rate - 137

6 36) Solve for daily payment using 21 business days Loan Amount - 150,000 Term - 4 months Rate ) Solve for daily payment using 21 business days Loan Amount - 28,300 Term - 11 months Rate ) Solve for term using 21 business days Payback = $102,000 Daily payment = $ ) Solve for term using 21 business days Payback = $40,600 Daily payment = $48333

7 40) Solve for rate Loan amount = $32,000 Payback = $44,160 41) Solve for rate Loan amount = $66,500 Payback = $89,110 42) A client has a current merchant advance and the balance is $18,000, they want a new first loan/lien, credit is 660 and the average monthly depsoits are $36,000 Is this client eligible to payoff the current first lien and get a new 1st lien? 43) A client has 2 current liens with merchant advance banks, the 1st lien balance is $12,000 and the 2nd lien balance is $8000 This client has 600 credit with clean bank statements and deposits $42,000 monthly Can they consolidate the 2 liens into a new first lien?

8 44) What is the most important thing you need to find out during a conversation with a client when presenting them with a revenue based loan 45) Why is it important to review MTD statements before sending finals up to underwriting? 46) What might trigger financials being requested as a funding stipulation for revenue based loans? There is wiggle room in this answer, just tell me the base reason why each individual lender might request this 47) When we get an approval, the daily payment or split is a percentage of that businesses daily gross sales Typically what percentage range do lenders take of the gross daily sales based on the approved fixed daily payment or credit card split 48) When you pitch a loan explain how would you go about finding the clients sweet spot when it comes to daily payment Explain your method 49) A client cannot get a revenue based loan with only 2 deposits a month? 50) A dismissed bankruptcy is just as bad as a discharged bankruptcy?

9 51) 5 Point Bonus question What is the Nugget? John is a small business owner in Toledo, OH He has owned a small diner for 11 years and the diner needs a bit of work as the interior has become outdated The diner gets packed because it has a great name in the community and serves feel good type food The problem is the diner is only about 1500 sq ft and often clients are waiting long periods of time to be seated and sometimes they even leave because they don t want to wait John explains that he wants $35,000 to do renovations to his diner, he mentions that they have an upstairs section that they use for storage but he believes they can clean it up and turn into a secondary dining area Currently Johns diner only has 22 total tables/booth but the upstairs is another 1200 sq feet so he can fit another tables in that section When asking John if he feels he can fill those new seats during lunch and dinner he is extremely confident that he can fill at least 3/4 of the area for lunch and fill it 100% for dinner John currently does $650,000 in gross sales per year with just the 22 tables he currently has available He explains the $35,000 will update the decor in the current dining area with new tables, booths, floors, paint, and wall fixtures The money will also fully renovate the upstairs area with new tables John has ok credit, he is around a 630 fico but does mostly credit card sales and he manages his cash flow perfectly, he is a bit old school in his mentality and doesn t understand loans that take daily payments and he has been turned down by his local bank Based on the data can we get John the $35,000, if so what is the "Nugget", explain how you would pitch this and create excitement based on how he would ROI vs the cost of the money you would lend him Be very detailed in your answer as there is a ton of meat in this conversation