Blog

The Lending Equation

March 3, 2019

The Lending Equation

Common Sense Commercial Loan Criteria

Character. This is demonstrated by credit and most recently, credit score. Have you paid your bills in the past? Judgements? Percent debt against credit lines greater than 30%?

Capacity to Repay. This refers to the actual ability of the borrower to repay the debt and how this will be done. This can be from the earnings from a business, cash flow from the investment property, or, the sale of the investment property. It could even be a forward commitment from a long-term lender in the case of the initial loan being short term.

Collateral. Collateral is what will be liquidated should the borrower not pay the loan when due. Note: the lender requires a margin above the loan amount to cover collection costs should it come to that.

Liquidity.  This is what the lender considers “Plan B”. In case the primary means of payback fails, you need at least “interest carry” in the bank until the situation is corrected. NOTE: this can also be satisfied in some cases by stable and substantial earnings of the borrow. Either from his/her “day job” or proven by historical tax returns where assuring the continuity.

“Skin in the deal”. The lender wants to make sure the borrower is taking great care of the collateral, doing everything possible to assure the project’s success. There is no better way assure this than the borrower’s hard cash investment in the project/property/collateral.

Conclusion: Whether a hard money loan, conventional, conforming loan, hybrid or alternate conforming loan, one or more of the above “always” come into pay. When the loan is reviewed by the lender, the transaction must make sense. Some new investors have been taught there is 100% hard money available. It does not fit into the equation since it costs 35% of the asset value to foreclose for non-payment. Thus, the maximum loan to value is 65%. Make sense?

If one of the above is weak, a strong “other” may compensate making for a loan approval, again, make sense?

Real estate portfolio benefits?

February 7, 2019

Real estate portfolio benefits?

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for [with properly leveraged funds], and managed with reasonable care, it is about the safest investment in the world.”  Franklin D. Roosevelt.  See GPA Capital/Investopedia Article

There is no better way to experience not only capital gains, but, long term stabilized income. Appreciation is an added benefit to this as well.

For this reason, as the economy is “heating up” GPA Capital has developed the tools you’ll need to take full advantage of these opportunities. See our website for useful tools including express loan applications.   Here is a guide to help you choose the right business loan, or, if you’re interest in investment, please give a call for a one-on-one.

Commercial Loans That Close

February 5, 2019

Commercial Loans That Close

Now that you’ve printed out the GPA Capital 2019 Planner contained in our last blog, it’s time to get going. We’ve streamlined our website and focused on our “Core Business” of “Lending”. Please stay tuned for updates. We wanted to get the year started off right. We’ve aligned ourselves with wider and deeper Capital Partners. We’ve seen the results already; January was a banner month.

Loan application are easier and quicker for 2019. You can apply directly on-line for each of the three main products:

Free Real Estate and Business Lending Guide Download

  1. Express Real Estate Loan Application
  2. Express Investor Real Estate Loan Application
  3. Working Capital and Operational Loan Application

 

2019 Funding Prep

December 28, 2018

2019 Funding Prep

To help you map out your profitable 2019, GPA Capital designed an exclusive planner for our readers [Planner]. This includes a full range of what you need to become more profitable, expand, fulfill your capital needs. For the next two weeks we are offering a no-cost review to help you learn your option to maximize your cash flow.

For a confidential consult, hand-write (or type) your input on the attached planner and fax back to my private fax line 866-892-1167.

As always, thank you for your trust and confidence!

The Ugly Truth About Merchant Cash Advances

June 14, 2018

The Ugly Truth About Merchant Cash Advances

If your practice has either struggled financially in the past, or is struggling right now, you know the pressure is overwhelming. This leaves many doctors in a panic to take any deal available, including bad deals like a Merchant Cash Advance (MCA)*. To make things worse, once you’re in an MCA, you’re “un-bankable” to most other lenders until it’s paid off. Learn more about MCAs here.

We’ve had many doctors ask us if we can get them out of MCA’s that are putting a huge squeeze on their cash flow. Yes, we can!

GPA Capital will refinance your MCA (and other short term debts) into a long-term SBA Loan. But this is Step 2. Step 1 in the GPA Capital Plan is to first increase your Internal Capital Growth dramatically, allocating that revenue to pay off any MCA or other business/personal loans.

GPA Capital uses this reported income for those six months to qualify you for a long-term SBA loan. Apply Here so that we can get you out of this pressure and on the right track.

*On the average, Drs. receive 6 to 8 MCA solicitations/MO, yep and 24 hour funding to boot!

Planning a Profitable 2018: A Daunting Task

December 29, 2017

Planning a Profitable 2018: A Daunting Task

strategic-planWhereas Cash Flow is the “life blood” of any business, recording, collecting and analyzing your business’ operations is the “heart.” The goal, always, is Continuity and Diversity of Income. Therefore, successful practices start their fiscal year with a plan that describes the strategic goals of the organization, its financial and other resource needs. Capital partners such as banks may require a formal business plan before approving credit. GPA Capital has developed a Planning Tool to help our followers and clients. You will benefit by reviewing these Top 10 Strategies:

Strategies I: Strategic plan

Strategies II: Budget

Strategies III: Legal

Strategies IV: Finance

Strategies V: Insurance

Strategies VI: Credentialing/Third-party payors

Strategies VII: Facilities

Strategies VIII: Staffing

Strategies IX: Practice Management

Strategies X: Banking Relationship

For further assistance and direction, feel free to complete GPA Capital’s brief Medical Practice Questionnaire at no cost or obligation.[Start Here]

Top 10 Reasons Physicians’ Commercial Loans Are Declined.

December 14, 2017

Top 10 Reasons Physicians’ Commercial Loans Are Declined.

Whether expanding your existing practice, purchasing a practice or planning your exit, at some point you will be planning to borrow funds for your Medical Practice. Each loan is like “going to battle” with a bank. Listening to the horror stories of our clients who have come to us after being shot down for their commercial loan request, we felt that it would help future borrowers to share what we have learned. Below is the short list and attached is the whitepaper.

  1.  Applying with the wrong lender. Simple, but the number one reason.
  2.  Lack strong “compensating factors”
  3.  Can’t properly document your income
  4.  Inexperienced loan officer or mortgage broker
  5.  Your reasons for seeking a long don’t make sense.
  6.  You don’t have a solid business plan.
  7.  The outside conditions are too risky.
  8.  Picked the wrong type of venture or initiative
  9.  Sandbagged by a know-nothing appraiser
  10.  Bushwhacked by new rules

GPA Capital tailors each unique loan for its providers to best serve their needs. Equally as important, we structure the loan package for minimum chance of being declined. Plus, we always have backup plans 2 and 3. Funding to a conclusion is our goal. Please review the material and should you decide, you can get started here.

Art & Science Behind Healthcare Borrowing

November 15, 2017

Art & Science Behind Healthcare Borrowing

Art & Science
Art & Science

As commercial financiers with decades of experience, we recognize that successful healthcare borrowing requires both “art and science.” Unfortunately, many providers don’t understand this and after weeks spent rounding up documents and filling out forms (then more weeks of waiting), 62% of loan applications still get turned down due to inadequate paperwork or poor communication.

Why?

Producing a successful commercial loan package requires 2 different skill sets. In school, most people are either good in English/Creative Writing classes (art) or good in Math classes (science) – or if not good, at least prefer one or the other. However, a successful commercial financier must excel in both.

How?

  • Writing: Clearly summarizing a borrower’s past (especially details surrounding issues like bankruptcy), the current status of the practice and then presenting future goals that lender’s buy into is crucial. Two fundamental rules in writing are “know your audience” and “know your subject.” By having an MBA in Finance and decades as both a commercial loan officer and commercial loan broker, Chuck Pope at GPA Capital has both rules covered. Knowing how loan officers analyze loan packages and the skill developed from writing hundreds of them himself provides the skill required to focus on each application’s highlights and downplay any deficiencies. Like any good biography, the story must lineup with the facts – in this case, the attached financial documents.
  • Math: Analyzing and extrapolating critical data from often thousands of pages of various personal and business financial documents going back years is hard. Then repackaging that data into clear and concise documentation that even the busiest loan officer can quickly find is even harder. By understanding exactly what data loan officers and underwriters are looking for, GPA Capital knows that, with a multitude of loan types and access to hundreds of lenders, with the right financial documentation, there is a fit for almost every situation.

Results?

By working closely with our clients, we craft loan applications that provides the required financial documentation and is framed in the best light possible. The result is a much faster loan with the best rates and terms available.

For more on this subject, get the free PDF Art & Science Behind Borrowing

To begin the loan application process, fill out this Confidential Conference Request.

If you have any questions or comments, please contact us at:

877.247.2776

info@gp-assoc.com

Visit our website

The Existential Threats and Solutions to Small to Medium Practices

October 25, 2017

The Existential Threats and Solutions to Small to Medium Practices

Part 3 of our educational series on Finance for Physicians. Now that you understand the fundamentals we laid out in week 1 educational series and week 2 educational series, our Healthcare Lending Team created the next whitepaper “The Existential Threats and Solutions to Small to Medium Practices”. Enjoy!

How to think like your banker: GPA’s guide to lending

October 17, 2017

How to think like your banker: GPA’s guide to lending

By understanding the fundamentals of how your banker analyzes potential loans, you become a much more formidable borrower. Plus, an educated and knowledgeable borrower is our best client.

Your banker subscribes to the “5 C’s” which he learned in banking school. We put together this informative eBook that is part of a 5 part series to bring you current with the state of the borrowing industry and how you might leverage your resources to improve your practice’s financial situation. The Five C’s Whitepaper, Educational Series 1 of 5. Enjoy!