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  1. #1
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    any lender offer actual banking type loan product?

    Have merchant does about 23mill a year. He currently has an agreement with his bank or loan from bank for 350k, he pays interest only every month then month 12 balloon payment for whole balance and then it renews again for the following year. Any lender offer some type of program like this where its I/O payments only with option to renew every 12-24 months?

  2. #2
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    Hard money loans are like that.
    Some banks have unsecured business LOC like that.
    Micah Markowitz | American Business Funders | mmarkowitz@abfunders.com | 646-883-9721 - direct

  3. #3
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    Quote Originally Posted by Sachip24 View Post
    Have merchant does about 23mill a year. He currently has an agreement with his bank or loan from bank for 350k, he pays interest only every month then month 12 balloon payment for whole balance and then it renews again for the following year. Any lender offer some type of program like this where its I/O payments only with option to renew every 12-24 months?

    What you are describing is a standard bank revolver. They create a limit with which they lend interest only. Typically they have a one month 'clean up'. If you are able to pay off your principal balance, they extend the revolver for another year- if you cannot- they 'term' out the principal and interest..

    This is standard C and I bank practice- so virtually all banks do this. They will typically require that the borrower switch corporate and personal accounts to their institution as well.. Issue is that banks typically do NOT provide enough liquidity. $23M a year and only 350k!!!

    At $2M per month (depending on the business and asset types) the client is just about ready for a $4M ABL facility where applicable

  4. #4
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    Quote Originally Posted by RichardGerard View Post
    What you are describing is a standard bank revolver. They create a limit with which they lend interest only. Typically they have a one month 'clean up'. If you are able to pay off your principal balance, they extend the revolver for another year- if you cannot- they 'term' out the principal and interest..

    This is standard C and I bank practice- so virtually all banks do this. They will typically require that the borrower switch corporate and personal accounts to their institution as well.. Issue is that banks typically do NOT provide enough liquidity. $23M a year and only 350k!!!

    At $2M per month (depending on the business and asset types) the client is just about ready for a $4M ABL facility where applicable
    I Have tried speaking to him about ABL and invoice factoring almost all his revenue is invoices but he is stern on what type of program he wants. I am thinking because he is an older merchant and has been using that revolver for quite some time just does not feel comfortable making the change.

  5. #5
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    Many clients are concerned about the difference between and ABL LOC and factoring- big difference. Factors PURCHASE the invoices and have a right to contact the payers and route payments to a third party. ABL LOC's do not contact the clients and do not collect payments.

    Perhaps an ABL facility written by a bank would satisfy the client..

  6. #6
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  8. #8
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