These loans are used to provide working capital to supplement cash flow fluctuations occurring in the course of normal day to day operations. The loans are typically revolving which means funds can be advanced and repaid as needed within an agreed borrowing formula. Depending on the business type, creditworthiness, collateral, earnings etc., formulas are set on the percentage of qualified receivables plus permitted inventory to establish the maximum funding at any given time. Typically the borrower may advance up to a n amount not to exceed the total of 80% of receivables and 50% of inventory.
Another source of working capital is Factoring. In this case the Company actually sell their receivable to a Factor for a percentage of the amount due. Typically the purchase amount is 80% to 90% of the total receivable due. The Factor then collects the full receivable. There are any number of terms and conditions to a factoring line. Some set up a reserve for potential loss, from which a portion may be paid back when the receivable is collected. Other factors charge interest on the amount funded until the receivable is collected. Still others use a combination of reserve, advance fee, and interest. Every deal is different, but we can assist in the analysis and placement.
Loans available for acquisition, new construction, rehab of an existing structure for lease, development or improvement for owner occupancy/ resale, or a simple refinance. We will require a current phase one Environmental Site Assessment report. Loan amounts up to 70% of the lesser of the purchase price or appraised value. If the request includes rehab, up to 70% as completed (AMI Lenders will advance rehab funds based on invoiced and approved completed work). Terms are negotiable with one to five year maturities, amortization up to twenty years, and fixed and floating interest rate options. Debt service coverage is negotiable.