DIFFICULT CRE CUSTOMER AVOIDS $25,000 PENALTY THANKS TO CONNEX
This client was a particularly tough one. He had an existing hard money loan that was about to come to term. He was unsuccessful at obtaining permanent financing. In a very short period of time he was going to have to pay a $25,000 fee for an extension, and that wasn’t going to buy him a lot more time. It would, however, force him to continue to pay exorbitant rates. It was $25,000 down the rat hole! Clearly, he needed permanent financing with cash out.
Some of the issues we were facing were:
- Borrower had poor quality financials and poor record keeping. There was actually enough cash flow; it was just very difficult to understand. Most underwriters won’t tolerate this. We worked with his accountant to improve.
- Borrower was very leveraged with real estate debt and overall debt with not much liquidity. If there would be a slowdown in his business or loss of rental income, this would create much hardship for him.
- Business debt schedule as well as real estate schedule were inaccurate. This needed to revised and corrected at least five or six times.
- Constant push back when asked to correct and provide detailed information. A difficult customer!
- Other hindrances to approval - Lack of following directions - Scans were cut off - documents were not initialed, signed properly or not dated. Many times, each of these documents took three or four tries to get correct.
In spite of all these roadblocks, we closed this deal in 13 calendar days after approval - 20 days total with pricing at WSJ Prime + 2.75% - SBA 7(a). This included an update on appraisal and a phase one report. We also provided $100,000 cash out for working capital.
The team spearheaded by ConneX helps you find “Yes” for your clients not just in CRE but in lines of credit, A/R financing, equipment financing, working capital loans (secured and unsecured), purchase order financing and more. We have a deep bench in every area as well; that means if our first or even second choice declines we have a progression of more credit flexible programs to access. This means declines will not be thrown back on your desk to start over with.
Let us be your ConneXion to YES!
Ralph Homan P (425)210-3352 F (425)645-3172 www.connexweb.com