[Quickfunder]

Merchant is willing to put up collateral to purchase a new business with its property. Owns current Business property that has significant equity.

[Quickfunder]

Merchant is not making enough to get an Advance that large. This would have to be a collateralized loan product. I have seen some posts here about some companies who will do Hard Money loans that also work in MCA's.

[Finance1]

Hard money won't work with a cross collateralized purchase money loan unless the merchant can come up with at least 30% down. One option would be $240k cash out on existing business to put down on the new business.

If the merchant doesn't have the means to come up with at the very least 25% of the purchase price in cash then don't chase a ghost.

Scotsman Commercial loan finder is a good tool. http://www.scotsmanguide.com/default.asp?ID=2120

[HorizonFinancialGroup]

Hello there I'm Jim with Horizon Financial out of Brooklyn, NY. I'm currently completing refinances, construction, SBA, purchases and other real estate and asset based transactions. my email address is James@thehorizonfinancialgroup.com. I'd like to hear about your client and his transaction. 50% split on all commish. Let me know.

[Quickfunder]

Hard money won't work with a cross collateralized purchase money loan unless the merchant can come up with at least 30% down. One option would be $240k cash out on existing business to put down on the new business.

If the merchant doesn't have the means to come up with at the very least 25% of the purchase price in cash then don't chase a ghost.

Scotsman Commercial loan finder is a good tool. http://www.scotsmanguide.com/default.asp?ID=2120

Would it be necessary to cross collateralize? There would only be one loan, and putting up the existing business-property to secure that loan.

[Quickfunder]

Hard money won't work with a cross collateralized purchase money loan unless the merchant can come up with at least 30% down. One option would be $240k cash out on existing business to put down on the new business.

If the merchant doesn't have the means to come up with at the very least 25% of the purchase price in cash then don't chase a ghost.

Scotsman Commercial loan finder is a good tool. http://www.scotsmanguide.com/default.asp?ID=2120

And thanks for the link.

[Finance1]

Would it be necessary to cross collateralize? There would only be one loan, and putting up the existing business-property to secure that loan.

If there is enough equity in the existing property to take out $800k cash and still have 30-35% equity leftover then it could potentially be done that way for sure. If there is an existing mtg on the property it would have to be paid off with the new loan as well.

There are some interesting ways to do hard money too. You can pull the first 12 months of payments out and have them held in escrow by an attorney so the first 12 payments are guaranteed to the investor. Max terms are typically 2 years and a solid exit strategy. It's been a while since I did a deal like that but I doubt it's changed much. Hard money is not a long term financing type. 1-3 years max.

[Quickfunder]

I don't believe there is a mortgage and the equity should qualify for that at least. Selling on 1-3 years will be tough, I was thinking a bit longer. Doing the math at just low estimates shows me he'll be making some tough payments for what the business is bringing in. The adjacent business is failing, so it'd essentially be starting over. Are these deals lucrative to pursue in your experience?

[Finance1]

Exit strategies don't require selling explicitly. You just need a viable plan to get out from under the hard money deal within the time frame that the investor requires. Refinancing is an option as well. That's part of the reason hard money requires substantial equity remaining after the deal.

Back in 2010 we dabbled with SBA 7(a) and regular commercial stuff. Worked a bunch of full applications through the process. They take anywhere from 2-6 months. It's a lot of work and a ton of stuff can go wrong. IMO- not worth the chase unless it's a slam dunk and even then... I think our success rate was 20% and that was after weeding out the dead as a doornail stuff.

Best thing to do is find a hungry com broker and just refer for a split on commish. You can typically get a half to 1 pt as a referrer. Chasing it yourself is a waste of time if you are busy with MCA stuff. There's a lot more than meets the eye with SBA, hard money, and standard commercial deals. Going in without experience probably won't bear any fruit until you take your lumps.