|
|
GLOSSARY
/ FAQ
|
Do
You Qualify For Real Estate Finance?
- Yes
If the income ratios and appraisal ratios meet
the lenders criteria.
- Maybe
There are some lenders out there willing to do
100% financing on projects that make sense.
Do
You Qualify For Real Estate Finance?
- Yes
If the income ratios and appraisal ratios meet
the lenders criteria.
- Maybe
There are some lenders out there willing to do
100% financing on projects that make sense.
Glossary
/ FAQ
|
ACCOUNTS
RECEIVABLE FINANCING: To accelerate cash
flow, invoices are submitted to a lender
(called a "factor") who advances
typically 80% of the invoice amount. The
factor receives a fee for the service which
is usually 3-4% of the invoice amount.
|
|
|
|
ACQUISITION:
A purchase of an asset, including stock; a
loan to facilitate this is called an
"acquisition loan".
|
|
|
|
ASSET
BASED: A lending arrangement where the
assets of the borrower are used to
collateralize the loan. The loan is usually
used for acquisition or working capital
purposes.
|
|
|
|
BANKRUPTCY
REORG: Strictly, this refers to a
bankruptcy proceeding where a company is
re-organized under the Bankruptcy Code. A
loan for this purpose is designed to
refinance a company to assist in removing it
from bankruptcy protection.
|
|
|
|
BRIDGE
LOAN: Financing between the termination
of one loan and the commencement of new
financing. The Bridge is paid off when the
new loan is funded.
|
|
|
|
BUYOUT:
Purchase of a controlling stock or
partnership interest in a company or
business.
|
|
|
|
CONDUIT
LENDING: A pool of mortgages purchased
by an investment bank or trust, to be resold
in the public market. The investment bank
acts as a "conduit".
|
|
|
|
CONSTRUCTION:
A construction loan is a temporary loan for
construction of a residence or building,
which may then be converted to a permanent
loan depending on the particular deal.
|
|
|
|
CONSUMER
LOAN: A Loan made for personal purposes
to members of the general public; consumer
loan are frequently regulated by government
agencies, depending on the type of loan.
|
|
|
|
CONSUMER
PORTFOLIO PURCHASE: The purchase of a
batch of loans (usually home mortgages and
notes, but sometimes credit card
receivables) from one institution to
another.
|
|
|
|
DEBT
CONSOLIDATION: The consolidation of
several different debts (such as a home
mortgage and credit card debts) into one
loan. Usually refers to a new larger first
or second mortgage. The object of the loan
is usually to reduce total monthly payments.
|
|
|
|
EQUIPMENT
FINANCING: A loan, usually called a
lease, to finance purchases of equipment,
with a purchase option at the end.
|
|
|
|
EXPANSION:
A loan to finance advertising, new
production or other expenditures, to
increase sales or revenues.
|
|
|
|
FACTORING:
See "Accounts Receivable". The
purchaser of the invoices is many times
called a "factor" and engages in
"factoring".
|
|
|
|
FRANCHISES:
A Loan to purchase a business opportunity
which is promoted by a franchise prospectus
filed with the federal and state
governments.
|
|
|
|
HARD
MONEY: High interest loans made to risky
borrowers who otherwise cannot get credit
for the particular purpose involved.
|
|
|
|
HOME
EQUITY LOAN: Usually a second mortgage
on a home to withdraw additional equity.
|
|
|
|
HOME
IMPROVEMENT: A loan for home renovation
purposes.
|
|
|
|
I.P.O.s:
A term used in investment banking to
indicate an first offering of securities by
a corporation in the public market
place/stock market.
|
|
|
|
IMPORT-EXPORT:
Financing to facilitate the purchase/sale of
goods or services from or to foreign
countries, usually effected through a letter
of credit. See "Letter of Credit."
|
|
|
|
INVENTORY:
A loan which is usually for working capital
purposes which secures the inventory of a
business as part of its collateral.
|
|
|
|
LEASING-EQUIPMENT:
A loan which is designated as a
"lease" for tax purposes, with
equal monthly payment, to finance the
purchase of equipment. A purchase option is
usually offered at the end of the lease
term.
|
|
|
|
LETTERS
OF CREDIT: A mechanism used to secure
payment for goods or services. Typically, a
purchaser of goods will deposit funds in an
American bank, to be transmitted to a
foreign bank, if the trustworthy foreign
bank verifies through documents (usually
invoices or bills of lading) that the goods
have been shipped. The mechanism is used
because the purchasers/sellers of the goods
do not have a relationship of trust, so the
banks are placed as intermediaries.
|
|
|
|
LINE
OF CREDIT: A line of credit can either
be secured or unsecured and refers to a loan
which can vary and be paid back or drawn
dawn by the month, depending on the
financial needs of the borrower and the
particular arrangement with the lender.
|
|
|
|
MERGERS:
A legal term referring to the combination of
two corporations into one.
|
|
|
|
MEZZANINE:
Second mortgage financing for acquisition or
other lending purposes. The mezzanine
financing imposes a lien which is in
priority between the first mortgage and
equity. Thus, the "mezzanine"
lender is in the middle, such as in the
middle rows of a theater.
|
|
|
|
MORTGAGES:
A lien document granting a lien to a lender
or claimant, granting the right (among
others) to foreclose or seek other remedies
in the event of a default in the terms of
the mortgage or an accompanying promissory
note.
|
|
|
|
NOTE
PURCHASING: The activity of purchasing
notes executed by purchasers of homes or
commercial properties, which are then sold
by the original recipient/lender of the note
to a third party purchaser of the note.
|
|
|
|
OPIC/FCIC:
The Overseas Private Investment Corporation
("OPIC") refers to government
agency which assists in financing for U.S.
Companies overseas. FCIC has similar
functions.
|
|
|
|
OWNER
OCCUPIED R.E.: A building or home,
usually used for both commercial and
residential purposes. The owner also
occupies the home or building.
|
|
|
|
PURCHASE
ORDER: An invoice issued to a seller of
goods or services to deliver goods or
services at a price. Same is a contract
enforceable in court.
|
|
|
|
R.E.
COLLATERAL LOAN: A Loan either partially
or completely using real estate as
collateral.
|
|
|
|
R.E.
DEVELOPMENT: A loan used for the purpose
of construction, improvement or
rehabilitation of real estate.
|
|
|
|
REVERSE
MORTGAGES: An arrangement usually
entered into by retired persons where the
equity in their homes is paid to them on a
monthly basis. Depending on the structure of
the loan, the property becomes the property
of the lender after the death of the
borrower.
|
|
|
|
REVOLVING
LOAN: A Loan which, depending on the
particular arrangement with the lender, can
be brought up or down in loan amount and is
renewable after the expiration of an initial
term.
|
|
|
|
SBA/SBIC:
"Small Business Administration"
and "Small Business Investment
corporation" refer to government
agencies that either grant or guarantee
loans to small businesses.
|
|
|
|
STUDENT
LOANS: A Loan granted to a student, with
interest and principal payments usually
deferred until after graduation.
|
|
|
|
TAX
EXCHANGE: The term usually refers to IRS
Code Section 1031, for exchanges of property
which are like in kind, so that capital
gains recognition can be deferred.
|
|
|
|
TURN
AROUND: A Loan granted to a company in
trouble, to reverse its financial fortunes.
|
|
|
|
UNSECURED
CREDIT: A Loan to a company or
individual(s) which is unsecured, such as a
credit card loan. Good credit is usually
required to obtain such a loan. Unsecured
credit may also be advanced to businesses,
if credit quality is acceptable to the
lender.
|
|
|
|
VENTURE
CAPITAL: Debt of equity financing for
new start-up ventures. Same many times
involves preferred stock as part of the
transaction.
|
|
|
|
WHOLESALE
CONTRACTS: Purchase of mortgage or asset
based loans by one lender from another.
|
|
|
|
WORKING
CAPITAL: A general purpose loan to a
business. A working capital loan is almost
always secured and many times is personally
guaranteed by the owner of the business.
Uses for a working capital loan are such
things as advertising, payroll and purchase
of new equipment.
|
|
|
|
z-FAQ
NOTES: The following FAQ's are primarily
for Lenders. We will soon have borrower
FAQ's as well. Thanks for your patience.
|
|
|
FAQ
/ Back
to Glossary
|
QUESTION: I
am concerned about being 'lost in the
shuffle' of too many lenders, and not enough
clients. Do you limit the number of lenders
on your site, and - if so - what is that
number? How many lenders are listed on a
given 'search result' (i.e. maximum)?
ANSWER: We limit the total
number of lenders on our website so as to
maximize the number of leads that any given
lender will. In search results, lenders are
NOT listed alphabetically, but are ‘randomized’
– this to maximize the possibility of any
given lender’s listing being at the ‘top
of the list’ on a search result. Search
results are limited to five lenders per
search result
|
|
|
|
|
QUESTION: (ON
DEFEASANCE TRANSACTIONS)
How
do the logistics of the securities purchase
and funds transfer work?
Who
buys the securities?
When
are the securities purchased?
ANSWER:
The
borrower hires an investment bank or other
securities broker/dealer to prepare “optimization
schedules” (the cash flow projections for
the securities designed to match the loan
payment schedule) and purchase the
securities.
|
|
|
|
|
QUESTION: How
do you get the word out about your service?
What forms of advertising and publicity do
you employ? How many people do you expect to
see your site, as a result of this
advertising.
ANSWER: We use a multifaceted
approach that includes, but is not
necessarily limited to: listing our service
on ALL major search engines; use of selected
on-line advertising, (banner ads and the
like). Print media, may be considered as the
site grows and develops. As our site is
brand new, we cannot give you ‘hard
numbers’ on exactly what our traffic will
be at any given time. However, we are
confident that our sales approach, which
will be continually refined as the site
grows and develops, will bring in sufficient
traffic to keep our lender-clients quite
busy!
|
|
|
|
QUESTION: Who
services your deals?
ANSWER: Our deals are serviced
by pre-arranged, rating agency rated, master
and special servicers or comparable large
financial institutions.
|
|
|
|
|
QUESTION:
Can you finance older properties?
ANSWER:
Yes, provided the property has been well
maintained with an acceptable maintenance
program for the future, and the property is
still competitive in its market. |
|
|
QUESTION: Leads
are a critical element of any lender's
business. How are leads generated by your
service?
ANSWER: Leads are generated in
the search process. When a borrower input a
deal, iCF database searches for a lender,
all of the lenders which appear in that
search result are automatically sent a
'Lead-page' with that borrower's
information. An iCF Member-Investment-Banker
can then contact that borrower at their
convenience. (Note to borrowers: The
information supplied by the you is strictly
confidential! It will be used to supply
member-lenders with your loan request data;
this information is not sold, leased or
otherwise distributed by
iCommercialFinancing.com to third party
information services or vendors).
|
|
|
|
|
ICF Media Web team