|
IWP!, flagship product is Chicago's premiere real estate Investment
magazine. Entitled Invest With Passion!, it is the tool for investors and professionals in the
Mid-West. The publication seeks to grow it's market share by providing
powerful information designed to build the reader both as an investor and a
person.
Since it's release in January of 2006, the magazine has been well received and
continues to gain momentum and support. The education, information, and
networking opportunities for the real estate investor has been long neglected.
No More!
The time is now and the momentum is building.
It's Happening!
|
|
INTERNATIONAL, OR OVERSEAS FUNDING SOURCES
By Graham Turnbull
As far as the international,
overseas, and offshore - and there is a difference between all three -
lending markets are concerned, there are many misconceptions and
misunderstandings. Not only among newcomers to these forms of funding,
but also by those who are not so new, but are inevitably not as successful
as they could be.
Further, many prospective
borrowers think that obtaining funding from an overseas, or offshore,
funding source is beyond them. Nothing could be further from the truth.
The fact is, particularly in the offshore funding industry, that offshore
lenders are predominately considered as funders of last resort. Often that
is true - probably because of some bad publicity about certain rogue
offshore 'funders'. But that also means, that when a funder in that
industry receives an application from a serious borrower, with a viable
application, it is more than ready to seriously consider funding the
application.
The inexperienced applicant
believes that a good broker can find funding for most applications, which
sound good enough. If the broker is simply firing out application copies,
as if from a shot gun - and so many, many brokers do just that - then that
is quite false.
In those cases, only about 10% of
transactions submitted to brokers are seriously considered further by
lenders. Of that 10%, only about 10% close. In other words, only about one
in a hundred of such applications - which are just sent off all over the
place - ever get funded. The major lending managers for some of the big
institutions and banks will confirm those figures. It is no secret within
the industry itself.
On the other hand, brokers, who
have a close association with particular lenders, will have a much greater
acceptance rate, and therefore, generally, closing rates will be higher.
In the case of our organization, applications vouched for and submitted by
brokers with whom we have had a long and successful relationship, or
alternatively, applications submitted direct from serious and committed
borrowers with a viable project, enjoy a success rate of over 90%. That is
simply because this reflects the quality of applications, which result
from focused and critical brokers, or applicants who are realists, and not
just dreamers.
Actually, no more than 15% of the
funding applications offered to international loan broker/financial
consultants are even worthy of consideration. Yet so many beginners in
this industry, or those who do not care, accept and try to place every
funding application they receive; regardless of the merits of the
application.
Thus, no matter how many sources
the broker has, he will not get those applications funded. But so many
brokers/consultants persist in being naive. It is little wonder that most
funding sources view the average financial consultants with cynicism.
Our position is that, if we
consider an application, and agree to proceed with the various steps, we
expect that the transaction will close, and that we will fund the
application.
Many brokers will advise their
clients that, as long as there are sufficient hard assets, i.e., tangible
property, the loan is assured - somewhere or other.
That is also quite false. Asset
security proffered without a sound plan for utilization of loan proceeds,
showing the ability to service the loan, and/or a lack of skill and/or
acumen by the borrower, has no real value in the loan market. On the other
hand, a solid plan for utilization of capital, from a knowledgeable
borrower, can often compensate for a lack in the hard asset situation.
For a business to obtain finance
is a means to an end, not the end itself. If there is an urgent or
desperate need for the finance, it must be obvious that the injection of
the finance will achieve that end. What finance is received today has to
be considered as tomorrow's earnings plus interest. If the project cannot
rationally evidence those future earnings, sufficient to service the loan,
lenders will not touch it. It then does little good to talk solely about
the assets, because no lender wants to have to realize on assets. That is
not the business lenders are in.
In our organization, experience
allows our experts to understand complex financial transactions, and to
understand that the differing needs of multiple participants in a
transaction do not always permit a single set of parameters to govern.
Funding of hotel projects, for example, requires a quite different set of
parameters, too - (for example, financing a ship building, or a loan for a
factory development). Each project is different, and the financing
requirements of each of them receives the careful attention of our
experienced executives.
In short, consider carefully where
you apply for funding, and be aware of the pitfalls.
**************************************************
Graham Turnbull is the Business
Development Manager for Capital Credit [Intn'l] Corporation, a company
that has been active as lenders, venture capitalists, and fund managers.
For more information, visit his website at
www.cccrd.com. |
|
|
