Chicago hard money lenders are popular once again, according to finance news. The popularity of private funders fluctuates, a lot like the economy. Years ago, they were considered “last chance” financiers. But, today they are the first and best choice for some borrowers. In particular, real estate investors have found that there are many advantages to borrowing privately. Commercial banks have only so much to offer.
Conventional financial institutions have many rules, regulations and guidelines to follow. The approval process can be lengthy and time consuming, particularly when the funds needed are for real estate investing, rather than a personal mortgage. They require that the borrower has a substantial down payment and typically finance only 80% of the selling price of a house. They have no options for funding closing costs. They can only provide funds for repairs or upgrades if the borrower takes out a separate loan. In short, when compared to hard money lenders Chicago banks take longer and approve less.
Chicago hard money lenders can close on a loan in as little as two weeks. They can pre-approve a loan in just a few days. Many specialize in funding rehabbers and other like them, so they base the amount that they are willing to approve on what the fair market value of the house will be after the repairs and/or upgrades are completed. Because of this, borrowers can sometimes get 100% financing and even roll in the closing costs.
From hard money lenders Chicago rehabbers can get funds for repairs. They can better manage their cash flow. They can make more deals and make more profits. So, now, you might be wondering how to find them. Some financial experts say that it’s tough. We think it’s easy. Because of the internet, it’s easy to find just about anything.
We have found some great Chicago hard money lenders that specialize in rehab funding. They have informative websites. They offer friendly advice about making the right deals and getting the best loan to value ratios. They outline their fees and requirements, right up front, so there are no surprises in the fine print at closing. They have a variety of payment plans to choose from and the fees that they charge are reasonable.
One final reason for the increased popularity of hard money lenders Chicago and other areas of the country are in what is referred to as a real estate slump. Sellers are having trouble finding buyers. There are many reasons that the seller may need to get out of his or her house quickly. It is harder for buyers to get mortgages than it was four or five years ago. We have seem many contract pending signs that stay on the property for months and months, only to be changed back to the standard “for sale”, when the buyer cannot get financing. If you approach a motivated seller with a firm offer, you can often get a great price.
If you use Chicago hard money lenders for funding, you can get the seller their money in as little as two weeks. Everybody wins. We hope the information provided here was helpful and wish you much success in your future projects.
By: James Whitmore
Chicago Hard Money Lenders Can Finance Your Real Estate Projects in the Windy City and Nationwide
March 6th, 2010 by admin No comments »How Government Contractors Finance Their Deals With the US Government
March 5th, 2010 by admin No comments »
Many Americans who fully understand that the Federal Government spends billions of dollars each year to run the country, do not fully understand that any “Government Ready” Business can bid on contracts with the Federal Government with very little working capital.
So the question is, how did they start out with very little investment and in some cases, poor credit?
The biggest factor in using someone else’s money to finance your deal with the federal government has to do with the Assignment of Claims Act that Congress passed in 1986 (31 U.S.C.3727) This act states that a “Contractor, or its assignee may assign its rights to receive payment due as a result of performance” to a financing institution. This is what we call the assignment of invoices., known as factoring or accounts receivable financing.
What the government did, was encouraged government contractors to acquire working capital through factoring. Factoring is the selling of your invoices for immediate working capital, rather then waiting 30, 60 or 90 days for the customer to pay you.
Financing companies who handle government contracts are familiar with the procedures to have invoices assigned to them and therefore they are comfortable with providing up 80 – 90 percent of the invoice to the contractor, immediately, once the paperwork is completed.
The Assignment of Claims Act enables government contractors, small business owners, minorities, women and veteran owned businesses to bid on project after project with full confidence that they could handle the cash flow, because of factoring.
Factoring is not available on all government contracts. For instance, it is difficult, but not impossible to find a Factor for construction factoring. And some Factors don’t like to finance contracts until after the work is completed and the government has been invoiced. In other words, there is a difference between financing invoices and financing a job that is not yet completed.
The secret to allowing someone else to finance your deal has a lot to do with what service you are providing for Uncle Sam. Example: Lets say you are providing 100,000 widgets to the Department of Defense. You locate a US company that makes the widgets and ask them for their lowest bid. You may or may not include them as a partner in the deal, but rather as a vendor for you. You bid on the job, you win the bid. Because you don’t have adequate working capital, you have already contacted an Accounts Receivable Specialist who has located, at no cost to you, Purchase Order Financing (PO Funding) and Accounts Receivable Financing. And once you complete the paper work, both of the Financing Institutions agreed that the deal is a go.
The PO Financing pays the manufacture, and the Accounts Receivable Financing provides you with up to 92 percent of the total invoice that the US Government owes you. Both of these transactions must coincide with each other.
Small business and large businesses are bidding on jobs, winning the contracts and repeating the process until their experience enables them to be the lowest bidder, and still show a profit.
In fact some companies open up entirely different division of their company just to accommodate government contracts that no one else is bidding on!
The answer is yes, Uncle Sam is contributing to the profit margin of small businesses owners throughout the US.
By: Cassandra Ingraham
