Financing Blog

Using Leaseback Financing for Short-Term Funding

Leaseback financing is an option if you are looking for short-term funding. You do need to own property that you are willing to give up ownership of in order to participate in this type of funding. However, it can be an option if you need money but don’t want to get tied into a long-term financing situation.

How It Works

Leaseback financing involves you selling your property to an investor. The investor will lease the property back to you. There is a set time period for this lease at the end of which you will then either just end your lease or have the option to buy back your property. During your lease period, you will have to pay monthly rent.

If you are looking into this as a short term option, you should remember that you will need to have the money to buy back the property at the end of the lease or you should be prepared to move on and give full ownership to the buyer. 

More Money Than a Traditional Mortgage

A benefit of a leaseback situation is that you can get a lot more cash than you would if you sold the property straight out. In addition, you have more negotiating power, and you retain the ability to use the property any way you want without normal rental conditions during the term of the lease.

Better Financial Profile

This type of financing allows you to create a better financial profile. This can be beneficial if you are trying to boost your credit for getting other funding. It eliminates the debt of the mortgage and introduces a deductible debt for monthly rent payments. Not to mention that you would now have the amount of money you got from the sale of the property. So, you will look much more appealing to traditional lenders.

Some Things to Keep in Mind

It may be difficult to find an investor that is willing to do this type of financing for a short term situation. Many investors want to be able to earn back their investment over time. However, you can make it more attractive if you make sure you prove that you will be able to buy back the property at the end of the lease. This way, your investor will know that he or she can expect to recoup their money when all is said and done.

Leaseback financing is something worth considering if you are looking into alternative financing options. It may not be for everyone, but if you own property and want to use it to help boost your working capital, then it could work for you.

White Plains, NY Rental Properties: Financial Security For Young Investors

From Pace to Purchase and all colleges in between, off campus housing and local rental properties are highly sought after. Some young commercial real estate investors are purchasing and renovating White Plains, NY rental properties to generate passive income while they are pursuing their degrees.

White Plains, NY Rental Properties For College Students

Access to spending cash is a scarcity for college students. Coursework does not provide much leisure time, and even less time to maintain a part-time job. However, White Plains, NY rental properties allow savvy students to earn money without having to put in much time. By purchasing, renovating, and renting out White Plains, NY rental properties, students can not only earn spending money, but they can also build a nice nest egg, while boosting their credit ratings through portfolio diversification. In short, college students with one or more White Plains, NY rental properties end up graduation with a much greater financial edge than other students in the area.

Creating A Plan Of Action

The first step in acquiring White Plains, NY rental properties is to look at listings. There are a number of homes and multifamily residences which can be purchased at or below market value. As with all real estate acquisitions, location is key. Rental properties in White Plains, NY should provide easy access to campus, shopping, nightlife, and jobs. Utilizing free time to renovate the property, either alone or with friends, can turn it into a viable rental. Remember, the more units, the better. Ideally, students should look for two or even three unit rental properties. This way, a portion of the income generated can go toward paying off the mortgage on the property, and the rest can go straight into a checking or savings account.

Financing White Plains, NY Rental Properties

For many college students, securing bank loans for purchase and renovate rental properties may not be a viable solution. However, there are flexible and affordable financing programs for property acquisitions and rehab projects. Fix and hold loans, lines of credit, bridge loans, and more can be arranged quickly to get a rental property to the point of generating revenue.

Talk To The Experts

At Lavan Financial Group, we specialize in commercial real estate financing solutions for White Plains, NY rental properties. If you are a student or the parent of a student, a rental property in the White Plains area can provide a financial advantage during and after the university experience.

Invoice Factoring: 8 Reasons Your Business Should Use It

One of the financing options that you have in your business in invoice factoring. It involves selling your invoices to get an advance on the money. The company that buys your invoice will then give you a percentage of the amount due and collect the invoice from your customer. There are actually many reasons why this type of financing can be beneficial for your business. Here’s a look at eight of them.

  1. Ability to Spend Funds Anyway You Want

When you secure a traditional loan, you usually have to explain how you will use the funds. You are then basically tied to using any funds you get for the specified reason. With factoring, you don’t have to explain what you will use the money for. You are free to use it any way you want.

  1. Affordable Fees

Factoring is much more affordable than conventional loans. Often fees can be as low as 1.5 percent of the invoice. Of course, fees vary depending on many different factors, but most often, factoring will cost you much less than other financing options.

  1. Fast Access to Your Cash

When you have to wait on customers to pay invoices, it means you are waiting to get cash you need for your business. When you use factoring, you can get access to the cash you need when you need it quickly. In many cases, you can get your application processed in as little as a week if it is your first time and only a day if you’ve done it before.

  1. Increase Profits

Being able to get fast access to cash can allow you to grow your business quicker and make smart investments that will allow you to increase your profits in the long run. In addition, you will be able to take advantage of special deals or offers on inventory purchases or use the money to hire more staff so you can handle a larger workload.

  1. Fewer Collection Issues

Because the factoring company will be collecting on your invoices, you no longer have to worry about collections. You can use the saved time and energy to put towards other efforts.

  1. No Credit Required

Factoring companies don’t really look at your credit. They are more concerned with your clients’ credit because they are who will pay them back.

  1. No Debt

Factoring isn’t a loan. You are selling your invoices, so you aren’t gaining any debt.

  1. Flexible Options

Invoice factoring is much more flexible than a loan. It doesn’t involve long terms, payments or contracts.

Unsecured LOCs In Stamford, CT For New Business Owners

There are times when traditional debt structures do not fit the needs of new business owners. Instead of taking out traditional loans, and trying to navigate the red tape of lending institutions, local business owners are turning to unsecured LOCs in Stamford, CT.

Unsecured LOCs In Stamford, CT Are More Flexible Than Bank Loans

There is a vast difference between unsecured lines of credit and bank loans. The requirements for traditional loans are fairly rigid. Businesses in Stamford, CT need to have high credit ratings and a well-established financial history in order to qualify for loans. Additionally, traditional loans place debt on the balance sheets, which can further hinder new and small business owners from achieving growth in a competitive marketplace. Unsecured LOCs in Stamford, CT offer much more flexibility than traditional loans. When local business owners seek unsecured LOCs in Stamford, CT the requirements are much more inclusive. Instead of bottom line numbers, unsecured lines of credit are based on overall profitability of the business. What’s more, unsecured lines of credit do not require any upfront collateral to access capital.

Unsecured LOCs in Stamford, CT Vs. Traditional Credit Providers

Any newly established business gets inundated with offers for “special introductory” lines of credit. Typically, these lines of credit offer extremely limited sources of capital. In addition to small amounts of financing, those special introductory rates are set to change after a period of time, or after a certain amount of capital is accessed. The interest rates can skyrocket within a month, placing a major strain on finances for new and small business owners. Unsecured LOCs in Stamford, CT on the other hand, can be accessed for as little as zero percent interest. Additionally, most unsecured LOCs do not have maintenance fees, which means business owners only need to repay what they use.

Who Uses Unsecured LOCs In Stamford, CT?

New and small business owners who need an extra source of working capital without the debt and restrictions of traditional loans take advantage of unsecured lines of credit. From retail businesses on up to manufacturers, construction companies, and everyone in between use unsecured LOCs in the Stamford, CT area to get the financing they need to maintain and grow operations.

At Lavan Financial Group, we specialize in working capital solutions for entrepreneurs in Stamford, CT. If you need financing, but want to sidestep the red tape and covenants of traditional loans, contact our offices and ask about our unsecured LOCs in Stamford, CT.

Why Even Small Businesses Should Offer Consumer Financing

Many small businesses operate on a cash only basis, meaning that they don’t allow consumer financing. If you are one of these businesses, then you could be holding your company back. Financing can be a great way to give your business a boost and help it to grow. In fact, there are a few specific reasons why you should seriously consider offering financing to your customers.

Encourages Purchases

When you offer customers the chance to buy things on credit, it encourages them to make a purchase when they otherwise would not. For example, if someone does not have the money to buy a new couch but they find a company that will sell them a couch with financing, then the chances are good they will go ahead and make the purchase. As you can see, offering financing can help customers to feel better about buying items that they might not have bought if they had to pay cash up front.

Draws in New Customers

Another way consumer financing can help our business is by drawing in new customers. There is even a potential for drawing customers away from your competitors. When people see that you offer a financing option, they may decide to shop at your business because it gives them the option to put their purchases on credit, freeing up their cash for more immediate needs. One of the biggest challenges of business is getting new customers, so this will help you overcome that hurdle without having to spend extra money on marketing efforts or other things you would have done to try to draw customers in.

Increases Profits

With encouraging purchases and drawing in new customers, it isn’t hard to see how offering your customers financing options can increase your profits. However, they also help increase profits in two other ways. First, they encourage people to buy more. Having the option to just put a purchase on credit often makes them a little freer with their spending, so they may spend more than they would have if they were paying cash. Second, you get to add additional charges for the financing, like interest or other fees, which can enable you to earn even more on every purchase they make. However, fees and interest can be waived to encourage more purchases, which in the end could bring in more money than these charges, so use them carefully.

Consumer financing can be a great tool to use to grow your small business. If you haven’t started offering financing, you should at least consider what it can offer your company.