[John Pedersen]

Hello, I have a client looking to consolidate 2 cashflow loans.

One loan is approx $95K (early $5K payoff bonus) and the other is a second position stack at approx $35k.

Gross income for the restaurant was around $250K for March.

Who would be the best lender, to negotiate a decent rate and consolidation for our client.

We do a lot of business with them so looking to get them good deal as can be had.

[Chambo]

I'd be shocked if you get this done PERIOD, much less "looking for best rate"

[John Pedersen]

ok, can you explain? I was under impression many lenders lend up to 100% of monthly gross. Loans are $130K combined which is less than 50% of $250K monthly gross.

Looking to understand process of consolidation. I see many companies offering multiple stack positions but not consolidations. thanks

[Generic_Funding]

I'd be shocked if you get this done PERIOD, much less "looking for best rate"

Sarcasm being the lesser part of valor.

[MCNetwork]

ok, can you explain? I was under impression many lenders lend up to 100% of monthly gross. Loans are $130K combined which is less than 50% of $250K monthly gross.

Looking to understand process of consolidation. I see many companies offering multiple stack positions but not consolidations. thanks

In order to refinance a merchant, lenders want him to NET 50% of the proceeds at a minimum. That means your merchant has to be approved for $260K. In order to qualify for $260K over a 12 month term he needs to be doing about $3 million per year. At a 12 month 1.30, this merchant would NET $130K and have a payback of $338K. The exposure to the lender for this type of transaction is huge and that's why many of them put a cap on the amount they are willing to refinance. The lender who chooses to accept this transaction will have balls of steel and your merchant better be squeaky clean and be in very strong financial shape in order to have a shot at getting approved. Most likely your merchant is in poor financial shape, hence the stacked loans.

[John Pedersen]

ok, learning more, thank you.

[Chambo]

this would DEFINITELY be a scenario where beggars couldn't be choosers

[WinHill Group]

We can get it done for you.

[John Pedersen]

We can get it done for you.

@WinHill If you can get it done, let me know contact info and potential terms and scenario. thanks [PM]

[ridextreme]

We do a lot of business with them so looking to get them good deal as can be had.

So you placed them in these two loans and now you are looking for a third funding source? Don't let the other two find out about this or they will cut you loose .

Are they looking for additional cash or are they only looking for a "better rate" on the two they have outstanding? If they get additional cash the payments they are making will be higher.

[John Pedersen]

a few months ago they were looking for cash flow because they were coming into season, to maximize profit, improvements etc... now the payments are a little suffocating, they are looking to have a longer term loan with 1 payment that is smaller than what it is now.

They already had the large cashflow loan, they needed more and the first position wasn't budging. So I reached out to another lender and they stacked the small loan on the back. I let both lenders know the client was seeking a consolidation, but both refused. I've spoken with other lenders and many of them seem ok with another stack, but this is not what we want for a host of reasons.

[jotucker1983]

John Pedersen,

Hello, I have a client looking to consolidate 2 cashflow loans.

One loan is approx $95K (early $5K payoff bonus) and the other is a second position stack at approx $35k.

Gross income for the restaurant was around $250K for March.

Who would be the best lender, to negotiate a decent rate and consolidation for our client.

We do a lot of business with them so looking to get them good deal as can be had.

You mentioned that he did $250k in March, what's his annual gross sales? If the balances total $130,000 and he's looking to pay them both off and net some money, he's going to have to be approved for give or take at least $260,000 - $300,000 so that he meets the required 50% plus net amount that most lenders have.

The only way he's reasonably being approved for that amount was if he was doing about $4 million a year in gross sales and the file is clean, which means his fico score is good, very low NSFs, no major liens (taxes/judgments), no bankruptcies, and no landlord issues.

Does he do $4 million a year? If he does, I can work the deal for you and if it closes, we can split the upfront commission 70/30 (70% to me and 30% to you) and you can have all of his on-going renewal commission.

a few months ago they were looking for cash flow because they were coming into season, to maximize profit, improvements etc... now the payments are a little suffocating, they are looking to have a longer term loan with 1 payment that is smaller than what it is now.

They already had the large cashflow loan, they needed more and the first position wasn't budging. So I reached out to another lender and they stacked the small loan on the back. I let both lenders know the client was seeking a consolidation, but both refused. I've spoken with other lenders and many of them seem ok with another stack, but this is not what we want for a host of reasons.

2nd position deals "might" work depending on the circumstances of the client at the time, such as their cashflow, average bank balances, ending bank balances, etc. But you have to be careful with those types of deals because if the payments collectively are set too high, then it could cause cashflow issues with the merchant in terms of NSFs, Overdrafts, low Bank Balances, Zero or Negative monthly ending bank balances, etc.

Give or take, you don't want to have cash advances taking anymore than 25% of the merchant's monthly gross (including 1st and 2nd positions), anything over that would likely start to cause cashflow issues. Give or take, a good range to stay in is under 10% of their monthly gross.

But yes, I can work the deal for you if you wanted, but unless he's doing $4 million a year and the file is clean (which it probably isn't clean because you said the merchant is having a hard time making payments so I assume the banks aren't good), then there's nothing that can be done for this file. Tell the merchant that he's going to have to "hold out" and keep paying off the balances.