[1Loanguy]

Currently have an SBA loan, have a 120k loan that they are paying over one year. Not MCA, bank loan.
Need/Want 3+ years.
Decent credit.
2.5 million in sales.
Very limited collateral.

[CritonCapital]

I assume no property to collateralize?

[brokerCompany]

construction are better suited for Lines of Credit or factoring. No long term lenders for construction without real estate or equipment

[TedFundy]

I assume no property to collateralize?

Can't use property to collateralize in Texas.

We could look into factoring them.

[RichardGerard]

Pointing out the obvious: The issue is the SBA loan: if they have a blanket UCC (which they nearly ALWAYS do), all of the assets (collateral) of the business are encumbered. The Bank would have to carve out the receivables (which can be done- but takes time and a forward thinking decision maker).

If the client has grown since taking out the SBA, they might be eligible for a larger facility. If not, people like Funding Circle subordinate to Senior Debt- but Debt Service Coverage and a strong guarantor will be the key.

[brokerCompany]

Funding Circle does not fund construction

[RichardGerard]

People like FC do- IF the numbers (earnings, guarantor, DSCR, use of funds for growth etc.) make sense.. Since there is Senior Debt EVERYTHING has to be strong- ESPECIALLY in a field that is considered high risk.. Because of the aforementioned reasons this one is likely tough

[B2csp]

we could get them the number they're looking for but if they are willing to do 18 months. In my experience merchant usually say 3 years out of defect of being used to deal with banks but once the numbers are presented to them they usually go for it. if he is producing 2.5MM he can definitely handle that amount in that period of time with no problem.

[RichardGerard]

B2csp,

From the information provided it seems the client has an SBA note and an additional 120k note for 1 year. They are doing 200k per month and you're saying he can 'definitely' handle more debt without knowing profit margin, or the other debt on the balance sheet.

Respectfully I think you'll agree without knowing the details it's hard to say the client can definitely handle more debt. If the Construction Company is subbing out all of its work, and pushing paper for a 15% GPM, they might be losing money with the existing debt burden.

[B2csp]

RichardGerard,

I'm afraid i missed that he had an sba loan as well, i was under the impression that he had a 120k loan from a bank for one year and that was it. In that case he would have been able to get a cash advance. You are right in that sense, he is not able to get additional debt but that would be taboo on your part knowing all that information about the merchant being over leveraged and still posting it here to look for 120k for a possibly longer term and to payoff the debt he currently have with the bank.

[RichardGerard]

B2csp;

I suggest you actually read the thread- and who was looking for the capital..

[globalconnect]

Call me on 412 432 8386

[williamvf]

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