Commercial Property Loans
- FHA-HUD (221 D4 / 223 F / 223 A7 / 232)
- Fannie May & Freddie Mac
- Conduit (CMBS)
- SBA 7(a) / SBA 504 / SBA Express
- Purchase & Sale Leaseback Stock Loans
- Minimum Loan Amount $100,000
- Advance rate of 65% for Traded Stock
Why Premium Business Credit?
- Application up to $50,000. No financial statements necessary.
- Middle market financing up to $500,000
- Large ticket over $500,000
- Little or no down payment
- Numerous payment structures
- We can finance almost any type of business related equipment
- Approvals for application in as little as 72 hours
- Up to 84 months to repay with excellent rates
- Asset based financing is a great way to obtain funding
Types of Leases We Offer
Sale & Lease Back
Many companies need working capital for expansion and do not want to use their bank lines for working capital. We have a program that uses the equity in your existing equipment to give your company the working capital it needs. We buy your equipment and lease it back to you and when all the payments are made you own the equipment again.
Most financial institutions will not finance companies that are just going into business. If your company has just started in business, or has been in business for only a short time, usually less than two years, we can help you grow by financing the equipment you need to be successful. Asset based financing is perfect for startups that had an initial investment and were able to buy products, machines, inventory, etc.
B, C and D Credits
In these tough economic times many businesses have suffered financially. Additionally, the owners of these companies have seriously damaged their personal credit. We have developed a “second chance” program to help these companies. We can structure your financial needs to help you rebuild your company.
Government and Municipal Leasing
We can provide lease financing to any government or municipal entity with guaranteed approval. The rate is determined by the rating of the municipality or government agency. A partial list of who we finance is listed below:
- Federal Government Agencies
- Armed Services
- State Agencies
- Public Schools
- Police Department
- Fire Houses
The above list is only an example of what we can finance. We can finance any state or federally controlled entity.
Common Equipment Leasing Questions
What is Equipment Leasing?
Equipment leasing is a process in which a firm (the lessor) provides financing for new or used equipment to another party (the lessee). Leasing preserves cash flow and offers tax advantages. Additionally, it helps businesses maintain up-to-date equipment and good business credit.
What Kinds of Equipment Can I Lease?
We are knowledgeable about businesses from the numerous industries that we work with, and are always willing to personally answer any questions you have. Premium Business Credit provides financing for numerous industries including computer software, restaurants, healthcare, manufacturing, construction, information technology, transportation, trucking and more.
What Types of Leases are Available?
The most common types of leases are fair market value (FMV) and dollar buyout leases. Businesses that choose to work with an FMV often obtain equipment that quickly depreciates in value. Dollar buyouts are ideal for ideal for those who plan on keeping their equipment at the end of the lease term. Other types of available programs are wrap leases, business expansion, refinancing, new business programs, sale lease backs and working capital loans. We offer a wide variety of solutions and our professionals will present the best one based on your needs and budget.
How are Lease Rates Determined?
Lease rates will depend on your credit history, the cost of equipment and the term structure you want. In addition, rates are fixed and can also be paid off at any time.
How do I get Started with an Equipment Lease?
Premium Business Credit simplifies the equipment leasing process. Our simple, hassle free application takes only several minutes to complete. Usually, you will receive a response within hours of submitting your application, and we can provide funding within 2-3 business days in many cases. In addition, our professionals will be working with you throughout the entire process to ensure your expectations are met and to answer any questions you have.
How Long Does it Take?
Premium Business Credit can provide up to $250,000 with a one-page credit application and up to $50,000,000 with a full financial package. Many times credit approval can be completed within one hour. Funding typically occurs within 48-72 hours after delivery and acceptance.
What are the Differences Between Leasing and Paying Cash?
Leasing allows your company to make payments in smaller installments, as opposed to making one significantly higher payment for the same equipment if you were to pay cash. Leasing allows you several tax deductions for your business as well under Section 179.
What's Differences Between Equipment Leasing and Bank Loans?
Getting approved for a bank loan can take weeks, even when you need capital right away. Plus, most bank loans involve lengthy applications and businesses need to provide large down payments and collateral. With equipment leasing, the application is only one page, and businesses can receive equipment without providing a financial statement or extensive collateral. Equipment leasing also allows for faster funding.
What Happens at the end of my Lease Term?
Fair market value (FMV) leases typically allow several options at the end of your term. Your first option is to return the equipment if your company has no more use for it. If you want to continue using the equipment without purchasing it, you can extend your lease agreement. Your last option is to purchase the equipment for its fair market value at the time. Dollar buyout leases allow the option of purchasing the equipment for $1 once the lease term expires.
Are Lease Payments a Tax Write Off?
Leasing gives your company the opportunity to deduct your installments from taxable income. Typically, the IRS will allow you to write off up to 100% of your lease payments on a True or FMV lease. Simply consult your tax professional, as every business is different.
Why Choose Midwest Corporate Credit for Equipment Leasing?
Premium Business Credit has been providing equipment leasing solutions to small and medium-sized businesses for years. Our experts, who have years of experience in equipment financing and know about the various industries we work with, will present you with the best financing options for your company. We offer competitive rates and our goal is to help you get the equipment you need quickly and for the payment structure you can afford.
- Favorable Terms: Typical loan terms are a 3 to 5 year term with a 1-2 year pre-payment lock out
- Agreeable Payment Structure: Loan payments are made payable quarterly on an interest-only basis
- Non-Recourse: There is no personal recourse in the event of default on the loan. The only collateral that is held for the loan is the pledged shares of stock.
- Attractive Interest Rate: A typical loan is offered at Midwest Corporate Credit plus one; slightly higher or lower terms may be applicable given certain variables and conditions.
- No Margin Maintenance Requirements: The structure of the loan does not include the use of margin maintenance requirements
- Investor Maintains Upside Potential: In the event that there is no default, the borrower will retain the benefit of potential appreciation to the value of the securities
- Loan-to-Value: The loan will range from 40% to 65% of the current stock value depending on the stock. To get started, you need to provide proof of stock ownership and date of purchase.
How can Premium Business Credit secure me more money than my broker can, or, in some cases, when my broker cannot lend me money at all?
The Securities Exchange Commission placed restrictions on which stocks brokers can lend against, and on how much they can lend their customers against “marginal” securities. Per our network of conventional lenders, Premium Business Credit has a greater range of options available to it.
Why can't my broker hold the shares for Premium Business Credit during the loan term?
Stockbrokers are not set up to guarantee that their customers, to whom they owe their first loyalty, will not sell shares. In the case of an emergency devaluation, individual brokers are often overworked and unavailable to make emergency trades to protect even their clients, much less Premium Business Credit or our network underwriters.
Where does Premium Business Credit keep its stock once transfer is complete?
Premium Business Credit our network underwriter maintains stock with reputable brokerage firms such as Scottrade Securities and Merrill Lynch. The accounts, in addition to traditional federal SIPC Insurance, also enjoy $150 million in private insurance for stocks within our network.
Why is there a delay from the delivery of my stock to the funding of the loan?
Because of recent changes in the law, stock transfer agents are no longer able to verify clear ownership of securities not in their physical possession. Premium Business Credit requires the time to verify clear ownership of any issues received. Prior securities counterfeiting problems and DTC transfer frauds have created the need for these increased security measures, which protect both the borrower, Premium Business Credit, and its network.
How does Premium Business Credit achieve payment?
By official bank check sent by Federal Express Overnight or federal funds wired, directly into your checking or savings account.
Can I redeem my loan early?
Yes. Your loan can be redeemed anytime, usually with no prepayment penalty. This can be accomplished by either sending the outstanding balance to the underwriter, or by calling at anytime and asking to liquidate the portion of stock, used as the foundation for your loan, necessary to pay the outstanding balance in which case the balance of the stock will be returned to you promptly.
Do I retain proxy (voting) rights for my stock?
No. Unfortunately it is impossible for underwriters, who are lenders, not stock brokers, to pass proxy rights through for the stocks we receive.
Will I continue to receive dividends?
Yes. All dividends received for the stocks you have will be forwarded to you. For your benefit, should underwriting liquidate a portion for the stock, you will automatically be reimbursed for any dividend lost as a result of the exercise of discretion.
SBA Loan Programs Overview
The Small Business Administration offers myriad loan programs to help small business owners obtain the necessary financing to keep firms going strong. In most cases the SBA doesn’t actually disburse loans directly, but rather provides lenders with federal guarantees and backing. When you apply for a product from the SBA, you will be going through a financial institution like a bank or a non-bank lender.
For this reason, there are no hard and fast terms on these loans, as the SBA will define certain maximum and minimum amounts, as well as other specifications. The financial institution that is providing the actual funding will establish the more specific requirements and terms of the loans. However, SBA-backed loans are often characterized by lower down payments, longer terms and more flexibility than other offerings. Further, they may be preferable from the perspective of the lender because of the federal backing.
The SBA7(a) Loan: SBA’s Flagship Product
The SBAs 7(a) Loan Program serves as an umbrella for several sub-programs, each with different specifications, uses and benefits. This includes products from the Export Loan Programs, Rural Business Loans, Small Loan Advantage (SLA) and Express and Pilot Programs.
As the SBA 7(a) contains several different products, the common uses vary for each. However, the most common uses of loans under this program include working capital for various purposes, machinery and equipment, commercial (owner-user) real estate. Borrowers can use the loans for existing firms as well as start-up ventures.
The common loan terms for SBA 7(a) loans are the following:
- When used for working capital – 7 year maximum
- When used for machinery and equipment – 15 year maximum
- When used for real estate – 25 year maximum.
- While specific financial institutions will iron out the finer points, the SBA sets specific maximum interest rates that vary depending on the amount disbursed. Currently the maximum interest rate allowed under the flagship 7(a) program is Prime + 2.75 percent.
- What you need to acquire loans in this program will vary by lender and must adhere to the SBA Eligibility Requirements. This ranges from collateral to credit ratings and the amount of cash equity that should be injected.
- SBA Microloan and new Small Loan Advantage (SLA Program): A Startup Favorite
The SBA’s Microloan Program is a bit more directed than the massive 7(a) umbrella, as loans contained within are meant to be distributed quickly and used for short-term needs. However, the pool of lenders that can distribute these loans is markedly smaller than other programs because the SBA dictates that they must be “specially designated intermediary lenders.” The agency demands that these organizations have a good track record with technical guidance and lending to small businesses.
Loans through this program are especially useful for startup businesses. Not only because of the actual terms, but because the SBA requires the intermediary lender to offer support, guidance and technical assistance to the borrower. In some cases, the small business owner will have to attend mandatory training sessions with the lender before and after the loan application process.
These loans can be used for several purposes, such as working capital, machinery and inventory purchases. The purposes will often dictate the interest rates and other specifications of the loan.
Specific terms and for micro loans vary by lender, size of the loan as well as what you intend to use the financing for. However, microloans have a maximum of size of $50,000. The SBA cites the average amounts as $13,000. The maximum term, as dictated by the SBA, is six years.
Most lenders will require a personal guarantee, a specific credit rating and some form of collateral for loans under the microloan program.
SBA 504 Loan Program: Financing for Assets
The SBA 504 Loan Program is a popular choice for commercial real estate financing. Commonly used for building and land purchases, equipment costs and renovations, the program offers financing for up to 90 percent of the total project cost, leaving the business with only a 10 percent equity injection.
In order to quality for an SBA 504 loan, the small business owner must plan to use 51 percent of the property for its own purposes within 1 year of the project.
The SBA partners with Certified Development Companies (CDCs), which are community-based lenders, and traditional lenders like banks. The CDC provides 40 percent in the form of a debenture which takes a 2nd position on the assets being financed, while the bank provides 50 percent financing in 1st position.
The SBA 504 Loan Program is also popular because it offers long-term loans at fixed rates. Since these loans will often be taken out in higher amounts because of the popular uses, especially construction of new facilities and renovations, they allow small business owners to make big moves for their company without very harsh interest rates 10 or 20 years down the road. The SBA 504 Loan Program is also popular because it offers long-term loans at fixed rates. Since these loans will often be taken out in higher amounts because of the popular uses, especially construction of new facilities and renovations, they allow small business owners to make big moves for their company without very harsh interest rates 10 or 20 years down the road.
While there is no maximum loan size for SBA 504 loans in general, the 40 percent debenture portion that the CDC provides cannot exceed $5,000,000.