Like this article? PLEASE +1 it! Evan Signature
Evan Carmichael Top Header
Share for a Cause









Real Estate Backed Financing

Written by: Ilya Bodner

Article Overview: Many private investors or alternative lenders will issue financing without any security or collateral, justified through risk mitigation of higher interest rates. However, collateral is not ruled out altogether in alternative financing. On the contrary, many alternative financing options include collateral to strengthen the deal and increase the loan amount. Real estate backed loans are among the greatest in volume and figures, having real estate to use as collateral has many advantages and its own set of limitations.

Free Download - Getting things going in a New Business By Ilya Bodner
Name: Email:

Real Estate Backed Financing

Many private investors or alternative lenders will issue financing without any security or collateral, justified through risk mitigation of higher interest rates. However, collateral is not ruled out altogether in alternative financing. On the contrary, many alternative financing options include collateral to strengthen the deal and increase the loan amount. Real estate backed loans are among the greatest in volume and figures, having real estate to use as collateral has many advantages and its own set of limitations. In order for property or for real estate to qualify for secured funding, there must be a substantial amount of equity available. Usually, private business lenders look for a minimum of 20-30% (70-80% Loan-to-Value or LTV) equity available in a property in order to qualify as collateral. If the borrower doesn't live up to his end of the loan agreement, then the lender can take steps to acquire the property or use it as a bargaining tool to collect the outstanding payments. Among many benefits, real estate loans bare lower interest rates.

StrongBusinessCredit is witness to both good and bad real estate transactions. Most shortcomings are the result of poor presentation, unprepared financials and/or absence of an execution strategy (covered in the business plan). Our clients are asked to revisit projections and business planning. Some minor yet effective tools include a Power Point presentation, demographic study of the surrounding properties, brochure outlining the highlights and-a business plan.

Related Articles
  Purchasing Real Estate using the SBA 504 Loan
  Time to Re-Finance or Buy a Home?
  What’s Your ABL Finance IQ? Info On Canadian Financing By Asset Backed Lenders !
  One Real Way To Solve business financing challenges - Asset Backed Lending
  Looming Commercial Real Estate Crisis offers Huge Opportunities in Self Storage.

Home > Small-Business-Loans > Ilya Bodner > Real Estate Backed Financing
Article Tags: alternative financing, business lenders, business plan, collateral, demographic study, effective tools, financing options, interest rates, loan agreement, ltv, poor presentation, power point presentation, private business, private investors, real estate loans, real estate transactions, risk mitigation, secured funding, shortcomings, witness

About the Author: Ilya Bodner
RSS for Ilya's articles - Visit Ilya's website

Over the course of the last 10 years as an entreprenuer I have successfully launched, managed, and sold off several businesses. Each organization has added some value to my understanding of the business world today. My philosophy has been that 9 things out of 10 that I try will fail, but that golden one is always worth the battle. In my experience that has proven to be the case and my successful businesses still operate today under the management of those whom I have sold off to.


Click here to visit Ilya's website
Dashed Line

More from Ilya Bodner
Thousands are getting fired What are people doing in tough times
A True Business Credit Card
Real Estate Backed Financing
Investor Options
GOING TO WORK VS COMING TO A PLACE OF BUSINESS


Related Forum Posts
Re: No money Down real estate Webinar Re: No money Down real estate Webinar - I wish I could attend. I want to learn more about Real Estate investing although I have to have other priorities at the moment. Can you keep me updated about the next one though?
Re: Hi Re: Hi - Thanks guys! I have been helping Real Estate and Mortgage professionals generate leads from the Internet for 5 years now!. I'd be glad to exchange some ideas. Have a great day=)
Re: Hi All, Re: Hi All, - Welcome Aaron!! what type of Real Estate investing do you specialize in? in Toronto I am involved in purchasing properties at wholesale prices prior to the owners going into Foreclosure.
Re: Invest in Real Estate or Stocks? Re: Invest in Real Estate or Stocks? - You can consider investing in Real Estate Investment Trusts (REITs). Buy and sell shares like stocks so they are easy to buy and sell, diversify and management is included.
Here to Meet Great People! Here to Meet Great People! - Hi Matthew Ferry here! I am a life coach and also an entrepreneur. I work with people from all walks of life, Real Estate Agents/Brokers, Entrepreneurs, Businessmen. Great to be here in this forum! Looking forward to hear from you! Thanks!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.



Featured Article


Bottom Footer
Share for a Cause












Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

Making the Most of Your Trade Show Experience

How to develop the best lateral thinking skills

Providing Feedback

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.