Unsecured Business Lines Of credit. Real Estate Investors, Business Owners, Start Up Business

Size: px

Start display at page:

Download "Unsecured Business Lines Of credit. Real Estate Investors, Business Owners, Start Up Business"

Marsha Shelton
8 years ago
Views:

1 Unsecured Business Lines Of credit Real Estate Investors, Business Owners, Start Up Business

2 What is this program? This program is an alternative funding method with these great features No Collateral No Tax Returns No Liens On Property No Minimum Liquidity

3 Who Is This Program For? Business Owners who are serious about growing their Business or just need working capital Entrepreneurs who want to start a Business and need capital to start their venture Real Estate Investors who want to start or expand their Real Estate Portfolio

need working capital Entrepreneurs who want to start a Business and

4 How Does the Program Work? Our experienced consultants will analyze your personal credit profile and will determine: If you qualify for funding How much you should qualify for Which lending institutions fit your credit profile

5 How Does the Program Work? During the funding process, our experts will negotiate with multiple banks (could be as many as 8) Using multiple banks will help to maximize your level of funding and build your business credit Establishing strong business credit will increase the bank s willingness to raise credit limits ands help you qualify for traditional funding in the future

as 8) Using multiple banks will help to maximize your level of funding and build your business

6 Business Line of Credit VS. Loan Business Line Of Credit Loan Used over and over No set payoff date Lower Payments (interest only) No effect on personal credit Reports only to your Business Credit Report No Liens on property Can be used for any operating costs: (payroll, advertising, maintenance) Loan Used one time then terminates Carved in stone payoff date Higher payments(prin. &interest) Loan reports to personal Credit Lien always placed on property Can only be used for stated Purpose Must be used for hard collateralized items

Reports only to your Business Credit Report No Liens on property Can be used for any operating costs: (payroll, advertising,

7 Unsecured Lines Of Credit VS. Traditional Lines of Credit Unsecured Lines Of Credit No collateral required Permanent Revolving not term loan Financials not required Traditional Lines of Credit Collateral required Reviewed every 18 to 24 months Could be turned into term loan 3- Years business financials Requires positive project and global cash flow Requires positive tax returns

Revolving not term loan Financials not required Traditional Lines of Credit Collateral

8 Unsecured Lines Of Credit VS. Traditional Lines of Credit Unsecured Lines Of Credit Subject to Increase Uses credit cards and 0% balance transfer checks No fee to use card One time 2-3% fee to use 0% Balance transfer checks with 0% Interest for 6-18 months Traditional Lines of Credit One late payment could result in lower credit available Uses Checks No fees to access, but interest from day one

balance transfer checks No fee to use card One time 2-3% fee to use 0% Balance transfer checks with

9 What Can You Expect? You will receive Unsecured Lines of Credit from multiple banks Our clients always receive the most competitive rates Money can be accessed with credit cards and 0% Balance Transfer Checks (10% of our clients receive 0% Balance Transfer Checks in their welcome package). Most clients have to wait between 6-9 months before the banks will consider issuing Balance Transfer Checks (important to use lines during this time to establish a positive history with the banks) 0% interest on Balance Transfer Checks is typically billing cycles Use the money at 0% interest without restrictions

cards and 0% Balance Transfer Checks (10% of our clients receive 0% Balance Transfer Checks in their welcome package).

10 Examples of how to maximize Balance Transfer Checks Write a balance transfer check for the amount of the credit line and deposit directly into business checking account for immediate capital (2-3% one time transfer fee) Write checks directly to merchants to pay bills (2-3% one time transfer fee) Transfer debt to the line of credit with the 0% transfer checks available, to consolidate other high interest bills (2-3% one time transfer fee)

fee) Write checks directly to merchants to pay bills (2-3% one time transfer fee) Transfer debt to the line of

11 Benefits Of Credit Cards Use credit Cards to : Pay for materials (most suppliers accept credit cards) Pay contractors (most contractors accept credit cards) Use the credit cards to make payments that you would normally pay by cash or check, allowing the cash or checks to invest in your company or Real Estate Portfolio. If Merchant will not accept credit cards: Suggest they use Square (free) to process your payment you can offer to pay the 2.9% fee Send money with Pay Pal (2-3% fee)

check, allowing the cash or checks to invest in your company or Real Estate Portfolio.

12 How Much Will This Cost? We are a completely Success Based Firm and No fees are charged Unless you are funded! Our Program Features No application fee You only pay a fee if you are funded Fee is charged to the line of credit after funding is completed (no out of pocket expense) One time set up fee of 11% of the total amount of the available credit upon funding

Our Program Features No application fee You only pay a fee if you are funded Fee is

13 Net Cost Of Fee The 11% consulting fee is almost entirely offset by the features built into your credit line. Features Include: The 11% consulting fee is a 100% tax deductible business expense The net cost of the fee is reduced by its tax deductibility (if 33% tax bracket this will reduce cost by 3.7%) To further offset the fee, banks include 0% interest for 6-18 months per line of credit (if market cost of money is 10% annually, this will reduce net cost of fee by 5-10%) If eligible, the fee can be reduced by 0% Balance Transfer Checks (if market costs of money is 10%, this will reduce the net cost of fee by 10%)

14 Using Unsecured Lines Of credit To Make Money In Real Estate (Example) Bob purchased a rehab home for $500,000 and obtained a 70% LTV hard money 17% APR. He used his personal funds of $150,000 for the down payment and needed an additional $80,000 for the rehab costs. Bob came to our experts and opened an Unsecured Line of Credit for $100,000 to use for his rehab and complete his project. Bob s Financial Position $150,000 Personal Funds $350,000 Hard Money Loan $80,000 Rehab Money (Unsecured Line of Credit)

He used his personal funds of $150,000 for the down payment and needed an additional $80,000 for the rehab costs.

15 Using Unsecured Lines Of credit To Make Money In Real Estate (Example) Bob s Revenue: Bob s Revenue: Purchase Price =$500,000 Home Sold Price= $840,000 Hard Money Loan 17% APR for 6 months) = $29,750 Rehab Cost=$80,000 One time Fee 11% = $11,000 Total Costs: $620,750 Profit: $219,250

$840,000 Hard Money Loan ($350,000 @ 17% APR for 6 months) = $29,750

16 Franchise Purchase Bob needs 100% financing to obtain a Liberty Tax Franchise. Our Experts established a $100,000 Unsecured Line Of credit that can be used for all costs. Cost to obtain Line Of Credit: 11% = $11,000 Processing Cost: $89,000 x 2.8% = $2296 Net amount of funding available: $86,704 Cost to acquire franchise $61,000 Working capital available: $25,704

Cost to obtain Line Of Credit: 11% = $11,000 Processing Cost: $89,000 x 2.

17 Real Estate Investor David needs 100% LTV Financing to obtain, rehab and sell residential property. Our Experts established a $100,000 Unsecured Line of Credit that can be used for all costs. Cost to obtain Line Of Credit: 11% = $11,000 Net amount of funding available: $89,000 Processing Cost: $89,000 x 2.8% = $2492 Cash Available: $86,508 Cost to acquire the property $39,000 Cost to rehab property $22,500 Sold the property for: $124,000 Total Costs: $74,992 Profits created: $49,008 Plus the Line of Credit is 100% available to be used again!

Cost to obtain Line Of Credit: 11% = $11,000 Net amount of funding available: $89,000 Processing Cost: $89,000 x 2.

Finding and Financing Your Small Business. Hosted by Susan Strong 77

Finding and Financing Your Small Business Hosted by Susan Strong 77 Welcome! we will begin the webinar at the top of the hour Finding and Financing A Business... Find out the benefits and facts Agenda