Introduction to Module 6 Finding and Matching Funding Sources For - - PowerPoint PPT Presentation

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Introduction to Module 6 Finding and Matching Funding Sources For - - PowerPoint PPT Presentation

Oct 07, 2023 333 likes •838 views

Introduction to Module 6 Finding and Matching Funding Sources For Your Transactions In an Ideal World You are generating business in a niche locally You are generating business in a niche nationally You have your "go to local

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Introduction to Module 6 Finding and Matching Funding Sources For Your Transactions

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In an Ideal World…

You are generating business in a niche locally You are generating business in a niche nationally

  • You have your "go to” local bank
  • They like brokers
  • They have aggressive rates
  • They have fast turnaround time for credit

decision

  • They offer private label documents
  • They are your back room
  • You are like an employee of this funding

source except you do not need to put up with all things you hate about being an employee.

  • You still have the ability to shop the deal if

they do not like the credit.

  • You have your "go to” national bank
  • They like brokers
  • They have aggressive rates
  • They have fast turnaround time for credit

decision

  • They offer private label documents
  • They are your back room
  • You are like an employee of this funding

source except you do not need to put up with all things you hate about being an employee.

  • You still have the ability to shop the deal if

they do not like the credit.

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This Ideal World Does Not Happen Overnight It becomes more natural to have “go to” source after you develop your niche.

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Module 6:

Finding and Matching Funding Sources For Your Transactions

Submodule 1 Equipment Finance Deals Submodule 2 Commercial Real Estate Finance Deals Submodule 3 Other Types of Products Submodule 4 How to Present and Using Dropbox Submodule 5 Master Database File

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Submodule 1 Equipment Finance Deals - Intro

  • Resources you can use to find funding sources
  • What you should know about local and regional banks
  • What do you want to look for in a funding source
  • How do you finally decide on a funding source to submit to?
  • Who do you ask for?
  • When do you contact them?
  • How many funding sources do you shop the deal to?
  • What information do you want to put into your database about a funding

source?

  • An interesting business model you might consider once you get good at this.
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  • ELFA https://www.elfaonline.org/
  • NAELB https://www.naelb.org/ $369/Year
  • The Monitor Daily http://www.monitordaily.com/
  • Leasing News http://www.leasingnews.org/
  • Local Banks
  • Regional Banks
  • National Banks
  • Google
  • BizLoanConsultants Database
  • Past customers you were unable to close a loan with.

Submodule 1 Equipment Finance Deals - Part 1

Resources To Find Equipment Finance Funding Sources

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  • Usually very small one or two person teams
  • Their job is to go around to their branches and teach branch managers,

business bankers, commercial lenders, and others about making sure they get the referral.

  • They move in and out of the business
  • They will typically have the best rates
  • They are more inclined to do small ticket leases (up to $250K)
  • App only deals will normally be fast (but not as fast as national Lessors)
  • Bigger (non-app only deals) say over $75k will be slow
  • They normally not have formal broker approval processes.

Submodule 1 Equipment Finance Deals - Part 2

What you should know about local and regional banks leasing departments…

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  • Will they do broker business
  • Direct lender vs rebrokered
  • Rates
  • Credit windows
  • Turnaround time
  • Equipment types
  • Reputation in broker community

Submodule 1 Equipment Finance Deals - Part 3

What do you want to look for in a funding source? (Preliminary information)

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  • Does the deal seem to fit into your “go to” lenders borrower profile?
  • Is it an application only?
  • Who are the “application only” lenders in your database?
  • Who has the lowest rates? (typically it will be a local or regional bank)
  • Who has the fastest turn around time?
  • Who is most likely to do the deal based on what you know about the credit?

Submodule 1 Equipment Finance Deals - Part 4

How do you finally decide on a funding source to submit to?

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  • Do they have an equipment finance or equipment leasing person or division
  • If not, how do they handle a request when one of their business customers

want to finance a piece of equipment?

  • Do they do leases at all?
  • Do they end up providing a LOC or other product.
  • Sometimes the person who answers the phone does not really know and you

need to move up the food chain (branch manager, commercial lender, etc..)

  • Keep in mind that all of these people have annual budgets too and what

better way to reach their budget than partner with a broker!

  • If you already are doing business with their commercial banker, ask them for

an introduction to the correct person (they get credit for this in some banks)

Submodule 1 Equipment Finance Deals - Part 5

Who do you ask for?

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  • Always better if you have a deal in hand but not absolutely necessary
  • Give them the bullet points not the customer name!
  • In some cases they will have already seen the deal.
  • You can also ask them about their declines

Submodule 1 Equipment Finance Deals

When do you contact them? Part 6

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  • My method was send to your “go to” sources first, then typically three sub

prime lenders afterward.

  • Low rate players expect some loyalty
  • Sub-prime lenders expect some loyalty as well but realize it is more difficult

to get based on the space the play in

Submodule 1 Equipment Finance Deals - Part 7

How many funding sources do you shop the deal to?

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  • Contact name, phone number, email
  • Do they do broker business?
  • Do they have an approval process?
  • What is their footprint - International, National, Regional, Local?
  • What deal size?
  • App only to what $$$ amount?
  • Credits accepted (A only? A, B, C programs)
  • Rates for A, B, C, credits
  • Do they have a direct sales force?
  • Equipment they like
  • Equipment they don’t like
  • Turnaround times based on deal size
  • Fee limits
  • Document requirements
  • How to submit deal
  • Notes

Submodule 1 Equipment Finance Deals - Part 8

What information do you want to put into your database about a funding source?

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WARNING - THIS IS A SOMEWHAT ADVANCED STRATEGY - PLEASE WAIT UNTIL YOU ARE COMFORTABLE WITH YOUR BUSINESS AND WHAT YOU HAVE LEARNED BEFORE YOU PROCEED! ALSO, IT IS NOT PROVEN BUT I HAVE SEEN IT DONE BEFORE.

Submodule 1 Equipment Finance Deals - Part 9

An interesting business model that I want to explore

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Submodule 2 Commercial Real Estate Deals - Intro

  • Resources you can use to find funding sources for commercial real estate

deals.

  • What do you want to look for in a funding source
  • How do you finally decide on a funding source to submit to?
  • Who do you ask for?
  • When do you contact them?
  • How many funding sources do you shop the deal to?
  • What information do you want to put into your database about a funding

source?

  • An interesting business model you might consider once you get good at this.
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  • Scotsman Guide
  • Local Banks
  • Regional Banks
  • National Banks
  • Google (“hard money commercial real estate lenders”, “conduit lenders”)
  • BizLoanConsultants Facebook Page (ask other students)
  • Past customers you were unable to close a loan with
  • C-Loans (http://info.c-loans.com/trade-one-banker-for-seven-hundred-and-

fifty-commercial-lenders)

Submodule 2 Commercial Real Estate Finance Deals - Part 1

Resources To Find Commercial Real Estate Finance Funding Sources

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  • Size of bank and deal, match loan size to bank size
  • Match property geography to bank geography
  • Direct lender vs rebrokered
  • Rates
  • Credit windows
  • Turnaround time
  • Reputation in broker community (protection from NDA)

Submodule 2 Commercial Real Estate Finance Deals - Part 2

What do you want to look for in a funding source?

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  • What structure are they looking for?
  • Does the deal seem to fit into your “go to” lenders borrower profile?
  • Where is it located?
  • How big is the deal?
  • Is it a “storied” credit? (hard money loan?)
  • Who has the lowest rates? (typically it will be a local or regional bank)
  • Who has sent you leads?

Submodule 2 Commercial Real Estate Finance Deals - Part 3

How do you finally choose a funding source?

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  • They will sometimes do smaller deals that bigger banks do not have an

appetite for.

  • They will sometimes know the market better than the larger banks.
  • They, in many cases, know the reputation of the developer in new

construction projects.

  • They will typically have the best rates.
  • They are more inclined to do smaller deals.
  • They are more likely to give you leads on deals than large banks.

Submodule 2 Commercial Real Estate Finance Deals - Part 4

What you should know about local and regional banks commercial loan departments…

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  • Who handles their commercial real estate loans, could be titled “Commercial

Lender”, “Commercial Banker”, or “Business Banker”

  • Sometimes the person who answers the phone does not really know and you

need to move up the food chain (branch manager, etc..)

  • Keep in mind that all of these people have annual budgets too and what

better way to reach their budget than partner with a broker!

  • If you already are doing business with their equipment finance rep, ask them

for an introduction to the correct person (they get credit for this in some banks)

Submodule 2 Commercial Real Estate Finance Deals - Part 5

Who do you ask for?

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  • Always better if you have a deal in hand but not absolutely necessary (they

are more likely to return your call if you have a deal)

  • Give them the bullet points not the customer name!
  • This is local doctor who invests in real estate
  • He is looking for a permanent loan with a 25 year amortization
  • It is 8000 sq ft office building that has a $849k sale price
  • It is 75% rented
  • He wants to put $100k in upgrades and repairs
  • He most likely has a perfect credit score (let them check the credit)
  • He is putting 20% equity into the deal not including the $100k in repairs
  • Deal is under contract and they are looking to close within 60 days.
  • In some cases they will have already seen the deal (especially bad deals).
  • Also this is a good time to ask them about what they do with their declines.

Submodule 2 Commercial Real Estate Finance Deals - Part 6

When do you contact them and what do you say? Part 6

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  • You need to get a good feel for the bank of first choice and their past reliability.
  • Credit approvals take much longer on commercial real estate transactions
  • If it looked like a bankable deal, my method was send to three lenders initially and let them know that
  • ther lenders had the package as well.
  • My “go to” lender would almost always get the deal if there were multiple term sheets offered.
  • If you realize it is a non-bankable deal, you need to revisit fee agreement with investor.
  • You can shop the deal vigorously if it is a hard money loan or a non-bankable loan.

Submodule 2 Commercial Real Estate Finance Deals - Part 7

How many funding sources do you shop the deal to?

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  • Contact name, phone number, email
  • How do they view broker business
  • What is their approval process?
  • What is their footprint - International, National, Regional, Local?
  • What deal size?
  • What do they require in their credit package?
  • What type of lending programs do they offer? (SBA, etc.)
  • Properties they like
  • Properties they don’t like
  • Credit turnaround times
  • How to submit deal?
  • Notes

Submodule 2 Commercial Real Estate Finance Deals - Part 8

What information do you want to put into your database about a funding source?

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Merchant Cash Advance AR Financing/Factoring

Submodule 3 Funding Sources For Other Types of Products

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Email Cover Letter and Write-Up (One in the same)

  • Give them the bullet point about the deal and now the deal name!
  • This is local doctor who invests in real estate
  • He is looking for a permanent loan with a 25 year amortization
  • It is 8000 sq ft office building that has a $849k sale price
  • It is 75% rented
  • He wants to put $100k in upgrades and repairs
  • He most likely has a perfect credit score (let them check the credit)
  • He is putting 20% equity into the deal not including the $100k in repairs
  • Deal is under contract and they are looking to close within 60 days.
  • Ask them what they want for preliminary credit review.
  • Ask them best way to deliver package (try to get appointment!!!!) Insist on a

meeting to deliver package!

  • If no appointment, ask them if they can accept files in “drop-box” account?
  • Number and index files in dropbox and include in the write-up.

Submodule 4 How to Present and Using Dropbox

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My personal file has years of notes about various funding sources. It also has many, many funding sources that have never been contacted that I have collected from various sources over the years. It will be suppled to you as a .CSV file that you can open as an MS excel file or that can be imported into a CRM program of your choice. It will be segregated to the best of my ability by the type of funding the do. I will also try to identify lenders of choice based on my teachings in this class. Keep in mind, that many of my relationships were with local and regional banks, they will be included in master file but will not be much use to you. You will need to build your now database of local and regional funding sources.

Submodule 5 BizLoanConsultants Master Database File

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