Mezzanine Loans

Mezzanine Loans

An increasingly popular loan vehicle for commercial property, the mezzanine loan is similar to a second mortgage with a major variation. Rather than being secured by the actual real estate property, mezzanine loans are secured by the stock that is held by the company that owns the real estate. The real estate itself has already been used to secure the first, or primary loan.

If the company fails to make timely payments on their mezzanine loan, the lender can foreclose on the property, seizing the stock. If the lender has control of the stock, the lender has control of the company and of the property or real estate. In fact, foreclosing on a loan that is secured by stock is much easier than foreclosing on a loan that is secured by real estate property.

If the loan holder defaults on the mezzanine loan, the lender can take over the stock of the company. This means that the lender can sell the property although it would still have to pay off or satisfy the initial mortgage. This strategy provides a streamlined foreclosure that takes much less time than the standard foreclosure on a mortgage.

Why would someone need to get a mezzanine loan rather than a conventional second mortgage? In many cases, the terms of the first loan preclude subsequent liens or second mortgages on the property. Hence, the mezzanine loan comes into play since it does not involve the actual real estate holding. It allows the borrower to have access to additional funds that would not be available otherwise.

Typically, a mezzanine loan is one that is acquired for a large project such as an office tower, large shopping center, shopping mall, large hotel, apartment complex, or industrial park. Mezzanine loans are large loans that cover millions of dollars of debt. In fact, mezzanine lenders are often quite specialized in the specific type of loans that they offer. Therefore, it might be necessary to search for a lender specializing in loans for the specific venture that you are in.

The first mortgage always takes precedence and the mezzanine loan always takes second place. For the borrower, one of the advantages is the ability to secure additional funds without the use of the property as security. The borrower can meet financial goals with the additional dollars provided by mezzanine loans. This would not be possible with conventional loans due to the terms arranged in the first mortgage.

One of the advantages for the lender is the ability to foreclose at a quicker pace should the need arise. The mezzanine loan is a form of junior financing that has no claim whatsoever on the underlying real estate or property. The company or partners in the project pledge their interest holdings or stock as security. The interest of all holders must typically be pledged to the lender of the mezzanine loan. This practice guarantees that the lender will acquire full control of the stock or interest in the project should the loan default. Partial control could inhibit the ability to sell the property in order to realize the repayment of the loan.

Mezzanine loans can be short term, long term, fixed rate, floating rate, amortized, or standing. In most cases, they are short term, interest-only, and floating rate loan transactions. Additionally, this type of loan is generally used to borrow millions of dollars.

It's only fair to share...Digg thisPin on PinterestShare on FacebookShare on Google+Tweet about this on TwitterShare on LinkedIn

Merchant Cash Advances

Merchant Cash Advance – Quick and Easy Small-Business Loans For Small Businesses By

Merchant cash advances, sometimes called business cash advances, are an extraordinarily useful alternative to the conventional small-business loans that do not cause quite so much hassle. While it seems somewhat arcane and complex, the merchant business cash advance is very simple and quite easy to accomplish for those in need. If your business accepts credit card payments from consumers and enjoys a specific amount of revenue every month on a regular basis, it is very likely that your business will qualify for this type of cash advance. The loan is based on future projected credit card sales, meaning that your revenue is the collateral against the small-business loan. Naturally, the merchant funding businesses are dedicated to making the process itself somewhat simple and it is easy to apply online in many cases.

The requirements for merchant business cash advance options are extraordinarily simple and very easy to qualify for. The company needs to have been processing credit card payments for at least two months in most cases. Naturally, merchant funding companies will want to require a minimum monthly credit card revenue amount, usually not a large amount, but directly tied to the amount that you intend to borrow. Of course, you will obviously want to consider the options available to you before choosing a specific type of merchant loan, regardless of what is available on the market. If you are seriously considering a business cash advance, it is important that you read the fine print and make sure you understand everything on the application so that you are not overlooking any hidden fees or charges. Upfront fees, closing costs and other types of fine-print can cost you a fortune if you don't happen to catch them the first time around. You should never be required to pay fees or extra costs on a business cash advance loan.

Collateral is never required in the case of a merchant cash advance. When you apply for a business cash advance loan, you will never have to provide any form of hard collateral in order to get your loan. Concerning financial statements, most merchant funding providers will only require a few months to ensure that you are making a certain amount of sales on credit cards. Since the credit card revenue is what the merchant cash advance provider is gambling against, it is important that you have some type of credit card service and that it be maintaining a significant amount of product sales for two to three months.

The merchant cash advance loans come in several different types. Fixed payments and what they refer to as fixed terms are two of the types of standards that can be brought to bear. Since many cash advance payments are taken out of the credit card sales in the future, there should be no talk of fixed payment schedules or any type of deadlines. For those funding providers asking for either fixed terms or fixed payments, it is wise to look elsewhere and simply ignore these types of lenders. It is simply not required of you to provide fixed payments or fixed terms, considering that the merchant service loan is supposed to come out of credit card payments. Most small businesses can gain $25000-$250000 per location.

Quite often, some merchant business cash advance providers will refuse to offer cash advance loans to a business that has been operating for less than two to three years. With so many different types of lenders in the world, it is easy to find a business cash advance loan at reasonable rates and there is no reason to capitulate to the lenders that are so difficult to comply with. There are plenty of merchant cash advance lenders that will provide you with what you need and only require you to be in business for 60 days and collect around $3000 worth of credit card sales per month to qualify.

A merchant cash advance [] is a great option for a person who owns a private businesses and is looking into the possibility of expanding. Professional business cash advance companies []

Article Source:

It's only fair to share...Digg thisPin on PinterestShare on FacebookShare on Google+Tweet about this on TwitterShare on LinkedIn