More Thoughts On Asset Based Loans And How To Qualify For One

More Thoughts On Asset Based Loans And How To Qualify For One

Huntington Beach, CA Asset based loans are a popular alternative to traditional bank loans. Business owners use their assets which typically consist of inventory, equipment and accounts receivable to name a few as collateral for an asset based business loan. However, having the collateral alone doesn’t qualify you for an asset based loan.

What else is needed to qualify for an asset based loan? Cash flow. Many times, business owners spend a good portion of their capital on inventory needed in their business. The inventory is sold to customers creating revenue which turns in to net income after all expenses are paid and the cycle repeats. The problem happens when the inventory is slow moving causing the cash of the company to be locked up in the goods held as inventory. As we know, inventory sitting on the shelf in the warehouse is not creating revenue. It needs to be sold or turned in order to generate cash flow which is the life blood of any business.

Companies that can not demonstrate the ability to pay the monthly payments on an asset based loan will not qualify. One half of the equation is having the collateral, the other half is having the ability to make the monthly payments and afford to take on the additional debt.

Sounds elementary, however, business owners often only look at one side of the equation. Asset based loans can work for both business and real estate purposes, but you have to have adequate income to justify the lender giving you the loan.

If the company does not have the income to cover the asset based loan payments, they will need to seek an equity investment which has a completely different analysis in asset based lending.

To your success!

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

A Word Of Caution When Seeking An Asset Based Loan

A Word Of Caution When Seeking An Asset Based Loan

Huntington Beach, CA Occasionally I feel the need to share some insight in to the capital markets and what it is like working with both clients and other consultants. Obtaining an asset based loan for your business is at times a frustrating process. There are certain consultants in the industry that have their clients sign a fee agreement with them promising a certain percent of the funded amount at closing. This amount can be anywhere from one to five percent of the loan amount.

The problem is, some of these consultants in the asset based lending space, do not have the lender contacts to fulfill the financing their client is requesting. As a result, they come to someone like us to assist in securing the funding.

All of our asset based loan partners, direct lenders, pay us upon the successful close of a loan. We never have the client sign a fee agreement for an asset based loan.

Once the other consultant has their client sign a fee agreement, it can be a burden on the client if they can not deliver the financing as promised. The client looks at them and wonders why they are paying them a fee when their consultant has to go to another broker to meet their asset based loan requirements. A good question.

In these cases, the consultant group that had their client sign a fee agreement, needs to adjust their fee and accept a smaller referral fee in exchange for getting the loan done and doing right by the client. In most cases however, the consultant will guard their client from others and attempt to find what they are looking for through common Google searches and LinkedIn contacts. This wastes time and often causes the client to get exhausted and find an option on their own.

The moral of the story is to choose your broker representative wisely. As a policy, you, as a business owner, should never sign a fee agreement until you know the broker can deliver. We take this out of the equation by having the lender pay us directly upon successful closing of the loan. We never take on an assignment that we do not already have a lender for ahead of time. It frustrates the client and damages our reputation.

Could your business use an asset based loan? If so, we would like to speak with you! You can reach me directly at 714-719-8966.

To your success!

Patrick Zazueta
Huntington Coast Capital, Inc.
714.719.8966

$750,000 Asset Based Equipment Loan Secured

$750,000 Asset Based Equipment Loan Secured

Huntington Beach, CA Huntington Coast Capital secured $750,000 in credit for a company in the trucking industry. The financing was a combination of a $250,000 term loan and an asset based equipment line of credit to be used as needed for new purchases. Like most of our clients, they were growing quickly and needed more money than their existing bank could extend on its own. Through our network of lenders we were able to combine two separate asset based loan programs to meet the funding needs of the company.

The term loan is set at $250,000 while the line of credit will grow with the demand the company is experiencing. Having the right funding partner makes all the difference. Could your business use and equipment loan or asset based loan to reach the next level? If so, we would like to speak with you.

To your success!

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

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

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

$250,000 Asset Based Loan Secured For A Music Production Company

$250,000 Asset Based Loan Secured For A Music Production Company

Huntington Beach, CA Huntington Coast Capital secured a $250,000 asset based loan for a music production company. The company is involved in music production, concert promotion and leasing production studio rental units. Under normal course of operations, the company requires large upfront cash out expenditures, especially in the area of concert promotion.

An asset based loan using the company cash flow and limited assets was secured where other lenders had passed. The new $250,000 asset based loan will allow them to grow their operations and take their business to the next level.

Huntington Coast Capital secures asset based loans for commercial real estate and business loan purposes. If your company has been turned down my traditional bank underwriting, try our asset based loan solutions for yourself!

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

Asset Based Equipment Loan Secured For Contractor

Asset Based Equipment Loan Secured For Contractor

Huntington Beach, CA: A demolition contractor needed to purchase some additional excavators for a recently awarded job in West Los Angeles. The contract was awarded and the City wanted them to start within three weeks. This deadline placed enormous pressure on the contractor to perform. If the asset based equipment loan was not secured in time, he could have lost the 4.8MM contract to another supplier.

Huntington Coast Capital explored a number of asset based loan options for the client. Including an asset based real estate loan secured against his personal residence. In the end, we were able to secure an equipment loan using only the excavators as the collateral. A master lease was arranged with the ability to amend the lease with new equipment lease schedules as needed going forward.

If your company is looking for an asset based equipment loan, give us a call 714-719-8966.

To your success!

Patrick Zazueta | Founder
Huntington Coast Capital, Inc.

Huntington Coast Capital Announces Personal Loan Product

Huntington Coast Capital Announces Personal Loan Product

Huntington Beach, CA: Huntington Coast Capital now offers a personal loan program to complement our business and real estate asset based loan products! Details on the personal loan program are outlined here:

  • Loan terms from 3, 5. and 7 years terms
  • Interest rates between 3.99% and 14.99%
  • Loan amounts from $25,000 to $250,000

Requirements:

  • Personal credit score of 680 or higher
  • A minimum of $50,000 personal income verified through personal tax returns
  • Less than 40% debt to income ratio
  • Tri-Merge credit report from all three credit bureaus (cost $1.00 if not free in some cases)
  • Apply here for the simple process and see if you qualify!

At Huntington Coast Capital we strive to seek out an bring new products to business owners and entrepreneurs! Our asset based lending programs serve business owners throughout California and nationwide.

HCC Secures Asset Based Loan For Importer Of Baby Bedding And Gifts

HCC Secures Asset Based Loan For Importer Of Baby Bedding And Gifts

Huntington Beach, CA: Huntington Coast Capital secured a $1,250,000 asset based line of credit against accounts receivable for a company in the baby bedding and gift industry. The company was able to secure an asset based line with additional financing in the form of purchase order funding, another form of asset based loan program.

Their current lender was more conservative than the funding we secured for them. HCC was able to provide them with an asset based solution that delivered more capital availability to grow their business. Their asset based loan availability grew from $750,000 to $1,250,000 allowing them to fill more orders from their major customers!

Could your business benefit from an asset based loan? Huntington Coast Capital secures asset based loans in California and across the nation. Give us a call to see how we can assist your business.

To your success!
Patrick Zazueta
Huntington Coast Capital, Inc.
714-719-8966

Asset Based Loans Versus Bank Loans. Which Is Better For My Business?

Asset Based Loans Versus Bank Loans. Which Is Better For My Business?

Huntington Beach, CA: Our clients come to us with an asset based loan or financing need that almost always is required in order to grow their business. If you are like most business owners, cash flow is tight and if you receive a big order outside the normal course of business, it could be challenging coming up with the cash to cover the cost of goods and deliver the product. Your cash need could also be to finance additional equipment and require an asset based equipment loan in order to meet the increased capacity required to fulfill a contract.

Traditional banking places the emphasis on the cash flow and financial strength of the company, the borrower. They are primarily concerned with how financially solid the company they are lending to is. This is good practice, and it makes sense that the companies that the banks deal with are in good financial health. The obstacle to clear however, is that most companies are leveraged to a high degree and can not meet all of the required ratios banks look for when making a credit decision.

If your company is growing quickly and every dollar is going back out the door to cover ongoing working capital needs, it is likely that you will not meet all the requirements of bank lending. For example, banks look at the leverage ratio of the company. This ratio is figured by dividing the total debt of the company by the equity of the company. Equity being the total assets minus the total liabilities. If you have more than 3 or 4 times the liabilities as you do equity, banks will shy away from offering you more credit for fear that your profits and company cash flow will not be able to pay off the new debt. Again, a prudent way to look at things, but the problem is that most borrowers do not qualify.

The advantage to bank lending is the cost. If your company can qualify, then banks will be able to offer the lowest borrowing rates.

The other option are asset based loans. Asset based loans have a broad spectrum of categories. An asset based loan can be used for commercial real estate purchases, inventory loans, equipment loans and purchase order financing to name a few. In an asset based loan, the lender is looking at the asset being used as collateral in the transaction. For example, if your company received a large purchase order and needs additional cash to pay the upfront costs or deposit required by the supplier, and asset based loan is a good option. The asset in this instance is the purchase order itself. Purchase order financing is often accompanied by a factoring loan. Factoring loans are asset based loans secured by the invoice sent to the customer versus the purchase order sent to the supplier. For more information on factoring loans click here.

In our experience, business owners are qualified for asset based loans more often than bank loans. We explore each option as appropriate and the obvious choice is always revealed in the end. Our clients like the unbiased consultation and industry insight we bring to the table. Because we are not lending our own money and acting in a consultant capacity, we are able to align ourselves on your side of the table and deliver the best options for you and your funding needs. Additionally, in the majority of cases, our services are free to our clients. Our lender network compensates us for bringing them asset based loan opportunities.

If your business would benefit from an asset based loan or equipment loan, give us a call. My direct line is 714-719-8966.

To your success!

Huntington Coast Capital Arranges A $150,000 Unsecured Loan

Huntington Coast Capital Arranges A $150,000 Unsecured Loan

Huntington Beach, CA  Huntington Coast Capital arranged an unsecured business loan for a company offering online teaching credentials. The company is the first online alternative certification program in South Texas to be approved by the State Board of Educator Certification (TEA) , and certifies candidates across Texas in over 25+ certification areas offered in the state of Texas including Career &Technology and Trade Vocations.

The curriculum allows candidates to review courses as many times as they need to, gives benchmark quizzes at specific intervals to ensure students are comprehending what they are studying, and provides the user with immediate feedback to track their progress.  In addition, they have partnered up with companies dedicated to test preparation and have incorporated their material and curriculum to provide their candidates with more opportunities for success.

The unsecured asset based loan was supported and approved due to the positive cash flow of the company. Traditional business loans are more geared to B2B companies with inventory and accounts receivable. Finding a loan proved difficult for the company and they urgently wanted to refinance some higher priced debt.

Through our broad base of lenders, we were able to provide them with a solution. Huntington Coast Capital prides itself on providing business loans to companies who otherwise would not know they are available. Could your business benefit from additional capital? If so, we would like to talk to you.

To your success!
Patrick