Asset Based Financing, Alternative Ways of Financing, Large Commercial Real Estate Projects

Traditional financing provides much needed support from the large commercial or other concrete projects, and it is especially advantageous for companies that plan months in advance. But what happens if the funding is needed immediately or clients minimal experience? Asset-based financing, customers can avoid the difficulties involved with traditional methods of financing.

The challenge
Due to the strict guidelines of many lenders, "the kind of large commercialProjects that are limited to finance them. These agreements involve formal appraisals, third-party reports and the approval of loan committees. In many cases, customer experience required to qualify or equity partners. The approval process is long, complicated and uncertain. Commercial financing should also play a last-minute surprises, would change the bank or financial institution means any conditions or draw. You can even compare with sufficient collateral, the project was not Garner approval. Worsenor can a bank call their scores by at any moment, as can their lending guidelines have changed, or their investors and regulators may not be satisfied with the choice of the institution's investments. This leads some customers to private investors (hard money), introduction of even more challenges, including higher prices, lower LTVs (loan-to-values), shorter maturities, higher fees and more attention to the failure of the project because of external or internal factors.

The solution
InSituations, the inclusion of a specific commercial or other project, asset-based financing provides a much faster and more direct path to approval. Asset-based funding using the customers existing equipment which in most cases, the elimination of opinions, third party reports and loan committees. In addition, this option provides increased client privacy. Asset-based financing does not require business experience or equity partnership, with the approval in less than 3 to 5 days and accelerate the funding in 30 to 60Day.

For example, a wealthy clients of the three dimensions Banc Corporation was trying to get the funding for various projects (commercial real estate and other fixed assets) in the U.S. and overseas, but was frustrated by aspects of the process of financing, such as underwriting and other third party reports. The client was rejected for funding at the final table, although he had a firm commitment from the lender and had a lot of time and money.

If the three dimensions, said to him,about the unique concept of asset-based financing, the customer was curious but not convinced that there is a workable solution. Three dimensions, it could show that the only way he would would not be promoted if the financial instrument if he was not valid or was he on the watch list. With this solution, he could get his projects funded very quickly while working on several projects. He was also capable of extended terms to get his needs, rather than under theLender's guidelines.

To start the process, customers simply request a Letter of Credit (LOC) issued by an investment bank evaluated. LOCs are guaranteed banks Liabilities Financial Instruments payments for a fixed period, as the device, the conditions are met. The LOC, also known as a standby letter of credit (SBLC) or irrevocable letter of credit (ILOC) must be unconditional. Customers must also provide adequate support assets. Investment banks sell them directly assessed to the client,based with rating requirements on the types and amounts of funding.

Many developers are using asset-based financing to avoid the trouble to demonstrate the viability of their project to a traditional finance companies involved. Because asset-based financing leveraged against existing assets, it is necessary to help to close a deal.

Flexibility is another perk. Accordance with the terms of the amount and type of funding could customers from monthly compounding and benefitPayments to simple interest rates with deferred payment and no prepayment penalties. Increased flexibility for LOCs more than 100 million U.S. dollars. Moreover, financial instruments that are adaptable to meet the needs of the customer. Many LOCs have an evergreen clause, meaning it can be extended, given the larger projects over time, if necessary.

The greatest advantage of financing secured by assets for the customer increases the LTV ratio, which may be significantly higher than for traditionalcommercial financing, escalation, as much as 100 percent of the LOC of the customers face value. These higher LTVs reduce the borrower's cash requirements significantly. When combined with the accelerated approval, the developers have a surefire way to success.

The ideal client
Asset-based financing is ideal for large enterprises, developers, and private equity funds, focused mainly in the real estate industry or primarily on tangible assets. Hedge funds arealso strong candidates, minimize project risk through advanced investment strategies. Asset-based financing can also finance a comfortable environment for offshore development projects. With the additional privacy by asset-based lending, developers can now finance a whole range of projects around the world who might fail to have been before.

With this new and exciting finance approach, you can now finance a project: global, with privacy, without the hasslesFinancing of the traditional methods, and efficiently.