Commercial Lending
Use this guide to save time, close more deals and give your client’s loan the best chance for approval. A well-organized loan summary should include the following essential information:
Executive Summary, this concise, but thorough, overview includes:
Description of Property & its Estimated or Appraised Value, Square Footage, Number of Units.
Loan Amount & Use of Funds - Debt owed/Liens on the property/Cash out?
Date of Purchase & Price - How much cash has the borrower invested.
Debt Service - How will the borrower make monthly loan payments? Will it produce income or is an interest reserve needed?
Loan Term Requested - GO Financial offers loan term up to 2 years. Payments are interest only and no prepayment penalties apply.
Exit Strategy - Refinancing? Selling?
Equity - GO Financial lends up to 65-70 LTV on purchases and refinances on income producing commercial properties. GO requires borrowers to have a minimum of 30% equity in their projects. Same secondary financing is allowed.
The Story - Why are you seeking hard money rather than conventional financing? What ‘Skeletons in the closet’ or ‘bumps in the road’ does GO Financial need to know about in order to provide you a quick, reliable answer?
Color Photos of the Property and/or Appraisal- at least three shots each of interior, exterior and the neighborhood. GO Financial does not require a current appraisal to review the loan.
Operating Income (P & L) - Most recent 2 years on the subject property; summary of lease agreements and rent roll. If owner occupied, provide operating statement from the business.
1003 Loan Application or Personal Financial Statement on the Borrower/Guarantor.
(Fax Number)
Terms & Rates
Major Factors Affecting Underwriting
- Location
- We loan nationwide
- Urban locations are preferred to rural location
- Income Producing
- Coasts-Preferred
- South-Preferred
- Midwest (IN, MI, OH, MO, etc.)- Only the capitals of each state or a town/city that houses a university will be considered
- (CO,UT,WY,MT, NM, ID, etc.)- Major cities, areas close to ski resorts, and ranches are preferred
- Raw Land
- Prime Locations- Waterfront, Resort, in the middle of a major city.
- Trophy Residential
- Prime Locations-Waterfront, Resort, in the middle of a major city, in a high end development/neighborhood
- Collateral (this one should be 2
- Ability to cover our debt service (3)
- Our exit strategy(4)
Min/Max
- Minimum-500k
- Maximum-None
Loan to Value
Loans that are used for refinance or cash out are based off of the “as is” value. Loan amounts that are used for purchase are based off of purchase price.
Tier I - Up to 70%
Tier II - Up to 60%
Tier III - Up to 55%
Tier IV - Up to 50%
Standard Terms
5 to 7 points above WSJ prime, floating with floor at original inception
TermUp to a 5 year balloon
Points2.5 – 4 points paid at closing (dependent upon how quickly the deal needs to be funded and the asset class)
Prepayment PenaltyYear 1- Yield Maintenance
RepaymentI/O, amortization considered case by case
Commitment FeeThe borrower’s commitment fee is used to cover our out of pocket expenses, in case the deal does not close. We try to keep this fee as low as possible, typically to cover a site inspection and appraisal. Loans that require greater amounts of due diligence prior to funding will call for larger commitment fees. On average our fees range from $2500-$7500. We have heard many stories of bridge or hard money lenders charging large upfront fees and then not delivering on their promises. GO Financial is in the business of making loans and has no interest in charging large upfront fees with a view towards not closing and keeping the borrowers money. We only charge enough to cover our out of pocket expenses associated with the transaction. Every expense will be documented. If GO does not close the loan, the unused portion of the commitment fee will be returned to the borrower. If the loan closes with GO, the money used for out of pockets expenses will be kept by GO and counted towards closing costs.
Miscellaneous
Cross Collateralization is always considered to make a deal strongerSpecific Type
Tier I (up to 75% LTV)Warehouses, Industrial, Office Buildings, Apartment Buildings, Self Storage, Retail
Tier II (up to 65% LTV)Mixed Use, Gas Station, Assisted Living, Industrial, Hotels, Motels, Mobile Home Parks, Marinas, Bar/Club, Gentlemen's Club and other Single Purpose Use Building
Tier III (up to 55% LTV)Agricultural Land, Trophy Residential, Horse Farm, Vineyard, Movie Theater, Bed and Breakfast
Tier IV (up to 50% LTV)Raw Land
EXCLUDE:
Restaurants, Houses of Worship, Development Loans, Day Care Centers, and Casinos.
Overview
GO Financial is an affiliate of a private investment company called American Residential Equities (ARE) www.arenow.com. We are direct lenders, not brokers and we do not securitize or sell any of our loans. Every loan is held for portfolio.
At GO Financial, we recognize that every transaction is unique. Our objective is to fully understand the borrower's requirements. We look at the whole picture, beginning with the "story" behind the transaction, then the real estate asset, and finally our exit strategy. Once we know all the facts, we roll-up our sleeves and get to work! GO Financial has a straight forward approach that gives us the ability to think outside the box and structure loans that work for a borrower's specific needs. Transactions are funded quickly and effectively because of our quick underwriting process, candid communication, and responsive service.
GO Financial's lending program provides borrowers with a financing alternative that is fast and resourceful to situations that are not served effectively by traditional lenders. Whether it is time sensitive funding constraints, bad credit, or alternative asset classes we are here to help fund your deal. Our expertise includes:
- Unique Acquisitions
- Bridge Loans
- Refinancing
- Partnership Disputes
- Foreclosures
- Tax Lien, Judgment payoffs
- Bankruptcy Resolutions
- Working Capital Needs
- Borrower Distress
- Discounted Debt Payoffs
- Hard Money Lender
- Joint Ventures
