Archive for January, 2009

Commercial real estate solutions

January 29, 2009

 

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We can accept CASH, CD’s, Treasuries and free trading STOCK

January 23, 2009

 

 

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Bank Instruments and trading programs

January 17, 2009

 

 

 

 

 

 

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Ten Million Dollar Clients

January 17, 2009

 

 

 

 

 

 

 

 

 

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Regulation D Offering

January 9, 2009

“Regulation D” is a government program created under the Securities Act of 1933, instituted in 1982, that allows companies the ability to raise capital though the sale of equity or debt securities. The programs were designed to provide two main things – an exemption to sell securities in a private transaction without registering the securities (something that happens in any transaction involving investors) and the appropriate framework and documentation for doing so properly. Regulation D Offerings are the practical method companies use to raise capital from individual investors.
Who should use a Regulation D Offering? Any company or entrepreneur that is seeking to raise equity or debt capital from investors.
There are 2 basic types of Regulation D Offerings that can be structured:

 

An “equity” offering is where the company sells partial ownership in the company (via the sale of stock or a membership unit) to raise capital. Equity offerings are preferred by early stage companies because there is no set repayment schedule or debt service payments – the investors profit when the company profits.
 

A “debt” offering is where the company raises debt financing by selling a note instrument to investors with a set annual rate of return and a maturity date that dictates when the funds will be paid back to investors in full. A debt offering functions much like a business loan except instead of a bank providing the financing it is a group of investors lending funds to the company. 

Preparing a Regulation D Offering is very straightforward. It involves three primary steps:
1. Pre-Offering Structuring: Most entrepreneurs are not experts in raising capital – and thus typically have poorly structured transactions. An improper or non-existent transaction structure will portray a very unprofessional image of you to potential investors. Thus, the very first step in an offering is properly setting the transaction structure and, in equity transactions, company share structure.
Pre-offering structuring typically includes such items as setting share price or note amount, determining how much of the company to sell (in equity situations), which Reg D program to use, setting the maturity date and annual rate of return for corporate notes (in debt situations), share allocations to principals so they maintain a set amount of control in the company, minimum and maximum offering amounts which set the effective range of the offering, minimum amount of investment per investor, etc.
2. Document Creation: Step two of preparing an offering involves the creation of the related Regulation D offering documents. These documents include:

 

Private Placement Memorandum: The Private Placement Memorandum, or “PPM”, is the document that discloses all pertinent information to the investors about the company, proposed company operations, the transaction structure (whether you are selling equity ownership or raising debt financing from the investors), the terms of the investment (share price, note amounts, maturity dates, etc.), risks the investors may face, etc. Do not confuse the detailed disclosures and transaction structure in a PPM with the general information a business plan provides – they are not the same.
Subscription Agreement: The Subscription Agreement sets forth the terms and conditions of the investment. It is the “sales contract” for purchasing the securities. It is practically impossible to raise capital without this document – investors are not going to invest into your company or opportunity based on a handshake. Would you invest into a company without having the terms and conditions of the investment set in writing and agreed to by both parties?
Promissory Note: In debt offerings you need to have a Promissory Note outlining the terms of the loan arrangement with the investors. The note is the actual “loan document” between the company and the investor.
Form D SEC Filing: The Form D is the notification filing that is sent to the SEC in Washington, DC. It notifies the SEC that you are using the Regulation D program and provides them basic information on the company and the offering. It is not an approval document or registration – it is merely a filing that notifies the SEC that you have a Regulation D Offering in place.

3. Marketing: The offering is now ready for marketing to investors. We provide our clients the capability to implement a diversified marketing campaign that involves NASD brokerages, Internet Marketing, and Direct Investor Marketing tactics.
A Regulation D Offering will solve all of the technical issues you will face when dealing with investors (investment structure, investment documentation, etc.) – these are issues that should be addressed before you interact with investors. Not addressing them ahead of time presents a very unprofessional image of you to the investor.

What is an investment Bank?

January 9, 2009
You may wish to better understand what is an “Investment Bank”.  Please find a good definition below:
 
 
“An Institution which acts as an underwriter or agent for corporations and municipalities issuing securities.
Most also maintain broker/dealer operations, maintain markets for previously issued securities, and offer
advisory services to investors. investment banks also have a large role in facilitating mergers and acquisitions
 private equity placements and corporate restructuring.”
 
Typically, Investment Banks are lead by a Principal(s) whom hold securities broker-dealer licensing, and such an institution has the capability,
and relationship wherewithal including associates in the securities industry, lending, legal, etc., to put together a solution in order to assist
clients to raise capital for quality projects.
 
We are particularly delighted with this new relationship, as this Institution is distinguished from other similar Investment Banks in the following ways:
 
1.     Creativity.
2.     Willingness to consider most any project, business model, etc.1
3.     Willingness to serve as a direct lender.
4.     Willingness to serve as a joint venture/venture capital partner.
5.     Access to other “niche” lenders and other providers.
 
1With the notable exceptions of the following project types:
 
1.         Raw Land
2.         Domestic Residential Homes
 
 
Specifically, this institution is interested in assisting with projects that are traditionally difficult to fund, as well as non-conforming, and even possibly
“distressed” situations.
 
Solutions are custom designed based upon the needs of the project, and the available resources given the situation, which may include:
 
1.     Debt
2.     Equity
3.     Debt/Equity
4.     Venture Capital
 
Even unusual collateral may be considered such as:
 
1.     Art
2.     Jewelry
3.     Other collectables
 
A number of different types of loans can be obtained such as, but no limited to:
 
1.   Equity Investments
 
2.   Business Loans
 
3.    Private Money
Private loans from $100K to $100 million
and up outside the US and Canada
4.    Conventional Mortgages
$100K and up available throughout the US and Canada
5.    Syndication & Securitization
 
6.    Major Metro Area ONLY Hard Money – Fast Close 
(1-3 yrs, Interest Only, no prepay) $100K and up,
Apartments, Mixed-use, Office, WH + construction / rehab funding N/A 
1.    ASSET DRIVEN
Up to 65% 11.9% and up 3 to 6 points
Big city metro areas ONLY ( NYC, Boston, Chicago, DC, Philly, Atlanta, Miami, LA, Seattle, etc..) 
Fast closings; property must have verifiable means to cover the mortgage payments and exit strategy.
2.    Owner Occ . Stated Income / Stated Asset
$150K to $5 million
Owner occ <= 5 units Office, WH, Retail, Medical, Auto Repair, Day Care. Etc..
FICO – 680+ Up to 80% on purchase Rate & Term refi; 75% cash out
Prime +  and up Min 25% owner occupancy;
Debt service coverage based on fair market rent of property; minimal paperwork & 30 to 45 day closing;
 
 
3.    Multifamily (2, 3, 5, 7, 10, 15 yr fixed term)
$250K + Apartments, Mixed Use (residential + other), MHP (better quality)
FICO 500 +
Up to 80% purchase / Rate &Term refinance UP TO 75% and cash-outs
3 – month LIBOR + 2.5% to Prime + 1 to 6 % depending on due diligence.
1.25 DSCR; 15/15, 20/20. 25/25 30/30 terms available
Full recourse;
CLTV to 90% on apartments + mixed use;
Market rent and interest-only options also available in certain markets
 
 
4.     General Commercial Loans
Office, Retail, Light Industrial, Ware Houses, Self Storage
(3, 5, 10, 15 yr fixed term)
$250K and up
FICO 500 +
3 – month LIBOR + 2.5% to Prime + 1 to 6 % depending on due diligence.
1.25 DSCR
3, 5, 10, 15 year fixed terms; with 5 or 30 yr amortization;
Full recourse; CLTV to 90%;
 
5.    SBA (full term fixed rates available)
$150K up to 5 million – Owner Occupied .
Most prop types include gas station, motel, daycare, assisted living, etc…
FICO – 680 + Up to 90% LTV
Purch or Refi and/or construction/ renov. funding ; Net worth >= 1X loan amt; 25%+ owner occ req.d; 1.25 DSCR; Full
recourse; >= 3 yrs exp in subject business; 3 yrs positive trend on tax returns OR high net worth + strong pro-forma
 
  
6.      SBA Look Alike,  (adj, 2, 5, 10, 25, 30 yr fixed terms) $200K to $6 million
Owner Occupied – Most prop types included, hotel/motel, daycare, assisted living, etc…
FICO – 680+ Up to 80%;
Lower LTV.s may apply to special use properties
Prime + .25% to Prime + 2.75%, Uses many SBA criteria but avoids full SBA underwriting process; Great for borrowers
who already have SBA; Best for props that have 3 yrs positive trend on tax returns + ability to pay w/ depr + int add-back to Fed net income; Borrower MUST have 3+ yrs exp in industry + own funds in property
 
7.     Bridge Loans – Nationwide Hard Money. Fast Close 
$500K + Any commercial property type
— interested in knowing the FICO, but typically not credit driven
Up to 65% LTV
9.99% and up depending on variables: location, type, credit history, circumstances,  exit strategy, etc
Full recourse to borrower; 6 months to 36 month terms,
Interest Only.
Interest and closing costs may be held in reserve escrow