14JulJuly 14, 2019 By Patrick

$500,000 2nd Position Commercial Real Estate Loan Secured For A Lodge In Big Bear, CA

Huntington Beach, CA A client came to us looking to pull cash out on his lodge property in the Big Bear area of California. The funds were to be used for improvements to the property. The request was a challenging one due to the fact that the commercial real estate loan request was really more of a small business loan.

Commercial real estate loans for specialty use or single purpose properties require a deeper analysis. Unlike traditional commercial real estate loans against traditional properties like office, industrial, multifamily and retail properties, specialty use properties need to be analyzed beyond the loan to value and income of property. If a bowling alley closes down, for example, the is significant cost in changing in to something else of improving the location under new management. The lender has to not only be in the property at a conservation loan to value, but also has to buy in to the business being able to survive on a going forward basis.

“This place has been here for years! This is not a risky loan for the lender!”

This is something we hear quite often when being sold on securing funds for specialty or single purpose properties. Anyone remember Circuit City? They were forced to close their doors and are currently under a massive re-organization. Established in 1949, they enjoyed steady success through the 70’s, 80’s and 90’s before feeling the pain of consumer shift to online shopping and competitors entering the space. I have personally witnessed McDonald’s locations closing! The point is that anything can happen with business purpose commercial real estate, no matter how large or how small the operation is.

What additional analysis is required?

Some of the points to consider with these property types are the following:

market demand for property
competition in the surrounding area
obsolescence of amenities or attraction (how many kids go to the arcade nowadays?)
quality of management
customer experience (in today’s world a bad Yelp review could have damaging impacts)
landscaping and overall desirability of the property

This is not a complete list, but covers some key points to be considered when financing these property types.

If you have a challenging loan request, we would like to hear from you!

To your success!

Patrick Zazueta
Huntington Coast Capital, Inc.
714-719-8966

31MayJune 5, 2019 By Patrick

HCC Can Now Offer Commercial Real Estate Loans In California

Huntington Beach, CA Huntington Coast Capital is now licensed to secure asset based, institutional commercial real estate loans in California. Prior to receiving the license, we were only able to place private money asset based loans for bridge or special purposes. Now that the broker license is in place, we can secure permanent funding for all asset types in commercial real estate.

We look forward to better serving our clients with our expanded asset based loan product offering. All types of commercial real estate will be considered. If you are looking for a commercial real estate loan, give us a call 714-719-8966.

08MarMarch 8, 2019 By Patrick

Why You Do Not Need Good Credit For An Asset Based Loan

Huntington Beach, CA

In the lending world, so much relies on personal credit as part of the analysis. Strong personal credit is something not everyone has, fewer than you think in fact. As business owners, when payments are delayed, you are forced to delay your payments to suppliers. However, because your business income is your primary source of income (in most cases), this means personal obligations can also be delayed. Timely payments on items such as your personal mortgage payments, electricity bill, car payments, and so forth all attribute toward your credit score. Delays in revenue and income from your business can quickly effect your personal life and negatively impact your credit score. A poor credit score makes it nearly impossible to be approved for additional credit.

Asset based loans come to the rescue in these cases! Asset based loans can be used for either real estate or business loan purposes. Let us explore below.

Asset Based Loans For Business.

The company balance sheet reflects all the assets of a business (remember assets, minus liabilities equals equity?). Assets that can be used as collateral for an asset based loan are accounts receivable, equipment, inventory, and real estate (more on asset based real estate loans below).

Accounts receivable are payment obligations from customers for goods purchased or services performed. An accounts receivable invoice reflects the amount due and when payment is expected (usually with 30, 60 or 90 days). These invoices are considered assets and can be used as collateral for a loan.

There are two types of asset based loans available against invoices and those are factoring loans and an asset based line of credit. A factoring loan is a buy sell agreement where the factor provides and advance against the face amount of the invoices to improve the cash flow of the business. Factoring loans are more than just an advance. In a factoring arrangement the factor manages the back office and credit and collection functions for the client. Outsourcing the back office functions is often more cost effective than hiring internal staff. For more information on factoring loans click here.

An asset based accounts receivable line of credit provides an advance against accounts on a total availability In this type of arrangement the lender looks at the accounts receivable aging and advances against the total balance outstanding. There is no back office management involved in an asset based line of credit and as such, the rates are a bit lower.

Asset based loans against inventory and equipment are just as you would expect. The lender advances against the value of the collateral. Proceeds are used to increase working capital and assist in growing the business. Equipment loans have been a major source of growth for us in the asset based loan category. For more information on this type of loan please visit our sister company Equipment Finance Quotes.

Asset Based Loans For Commercial Real Estate.

Commercial real estate transactions also use asset based loans on a broad basis. If you have a traditional property type and have plenty of time to close using a bank is your best bet. High scrutiny in underwriting translates in to lower rates although the process can be tedious.

Asset based loans in commercial real estate are used as bridge loans to acquire property. Scenarios where time is of the essence or where a property requires creative underwriting, fit well with asset based commercial loan requests. Virtually all property types are considered and the process is much faster and much less document intensive than traditional bank loans. For more information on asset based loans for commercial real estate click here.

You noticed that I did not mention personal credit in any of the explanations above. This is because it does not come in to the analysis to any important degree. The only exception to this is if the borrower has a negative mark on his credit where a lender providing a similar loan took a loss on that loan. Poor credit due to inquiries, slow payment of personal obligations, charge off notices, default on credit cards and the like rarely come in to play. The main focus is the quality of the asset being used as collateral.

I hope you enjoyed reading this. If your business could use an asset based loan or if you need an asset based loan to acquire commercial real estate, give us a call at 714-719-8966.

To your success!

Patrick Zazueta | Managing Director
Huntington Coast Capital, Inc.

23Dec By Patrick

Introducing Equipment Finance Quotes.com!

Huntington Beach, CA Huntington Coast Capital has launched a sister company specializing in asset based equipment loans and lease programs for asset based equipment loan requests of all sizes.

Equipment Finance Quotes (www.equipmentfinancequotes.com) brings business owners and/or their consultants together with the right lender for their asset based equipment loan request. It works by matching the questions asked on the online application with the requirements from lenders on the platform. Once all of the questions are received, a preliminary estimate on the chances of approval is issued. From there, a list of required items is requested from the business owner to complete the underwriting review. If approved, a term sheet is issued by the lender and the business owner and lender are placed in direct contact.

The inspiration for Equipment Finance Quotes.com was similar to what inspired Huntington Coast Capital. We want to simplify the process of finding a loan for business owners. Additionally, we want to not only find the right loan for the business owners request, we want to provide them with some options to choose from and get some lender competition going for their request. Through our online platform we are taking the time, frustration and energy out of the process and providing the business owner with a user-friendly customer experience.

We launched Equipment Finance Quotes.com to handle the amount of equipment loans being received. Our inquiries in this area required a separate platform to better streamline these requests.

If your business could use additional equipment for growth or a line of credit against existing equipment, we would like to hear from you. Please visit us at www.equipmentfinancequotes.com.

To your success!
The Huntington Coast Capital Team.

28JulJuly 29, 2018 By Patrick

Huntington Coast Capital Secures $300,000 Factoring Line Of Credit

Huntington Beach, CA An advertising company is the latest example of our asset based loan success stories! The company specializes in Social Hotspot/WiFi Advertising. Their slogan, WiFi is Smart. Phones are Smart. Is Your Advertising Smart? says it all. Their ability to target the audience of their clients with real time advertising sent to the target customers cell phone, is a powerful and engaging marketing concept. They can target age, gender, interests, location and more, to drill down and put the appropriate ads in front of people that would have the most interest. Targeted mobile marketing is the wave of the future in advertising!

The Challenge: Like most of our clients, they were growing quickly and struggling to keep up with the day to day working capital needs of the company. They needed an asset based loan secured by their accounts receivable to speed up their cash cycle. However, this was a more difficult funding request due to the fact that they bill their customers ahead of services rendered. I would estimate that 99 percent of the asset based loan providers that are lending on accounts receivable need to finance the invoices after the service or product has been delivered. We literally spoke with over a dozen companies to discuss a factoring loan for this client. After several attempts we found success with a progressive and forward thinking asset based loan lender. They secured the working capital loan they needed and can now grow the company without worry of running out of cash to support their growth!

If your company could use an asset based loan for your business or an asset based loan secured by commercial real estate, we would like to hear from you! We enjoy these success stories and would like to feature your business in the next one!

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.
714-719-8966 direct