How to Get a Business Loan for Commercial Real Estate. Charles Ph.D Barthelemy

      

      How To Get A Business Loan for

      Commercial Real Estate

      2012 EDITION

      by

      CHARLES BARTHELEMY

      Copyright 2012 Charles Barthelemy,

      All rights reserved.

      Published in eBook format by eBookIt.com

       http://www.eBookIt.com

      ISBN-13: 978-1-4566-0667-1

      No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems, without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.

      INTRODUCTION

      My name is Charles Barthelemy, founder of Barthelemy Commercial Capital. As a notable and respected mortgage banker in the Atlanta, GA community, I founded Barthelemy Enterprises in 2001 while being employed with Wachovia Bank now known as Wells Fargo Bank. During my ten year tenure that resulted in me overseeing 8 bank branches, I found myself having to tell more customers that their loan request was declined rather than approved. Seeing that the bank has set guidelines, any projects outside their box were declined. For example, a customer may have one derogatory item on their credit or don’t have a relationship with the bank (No accounts with the bank) or the project that they are seeking funding for did not fit the bank’s strict parameters and blueprint, such as hotels, night clubs, multi units etc. and their loans would get declined.

      Along with the strict guidelines, as a Wachovia employee, I was restricted in what I could and could not tell the customer, which I will go into more detail in Chapter 5. I found that 60% - 70% of my customers were strong in some areas and weak in others (Credit, Personal Financial Statement, Liquidity, accounts with the bank etc.). Over the years at Wachovia Bank, I found myself declining 7 out of 10 prospects that applied for some type of business funding because of hard bank criteria. As bankers, we have a tendency of thinking that the guidelines that the financial institution that we are working for is the law, written in stone. Now when I say the law, I am referring to the programs that the particular bank offers. Working for one of the top 10 banks in the nation, I figured if they cannot approve my clients then no one can. Boy was I wrong! Sending out “Declined” letters became a daily routine for my staff and I. As a SOLUTIONS oriented person, I realized that there had to be other sources that would give my clients a chance. As the old saying goes “If there’s a will there’s is a way”. In 2002 I made the decision to resign from Wachovia Bank so that I could seek other funding solutions for my clients. I sought them and I found them.

      One of the country’s most trusted and respected real estate financial providers, Barthelemy Commercial Capital and its officers has over twenty-five years of combined experience, dealing in the commercial and residential funding market. We pride ourselves on being fast, flexible and creative. We often see solutions that other companies can’t.

      When structuring a loan for our clients, communication is 95% of it. We make sure we keep our clients posted on a daily basis on what is taking place in the loan process. One thing B.E. will not do is waste your time. We believe your time is extremely valuable, and so is ours. To sum it up, if we can help you we will tell you, and if we can’t we will tell you that as well.

      In my many years of experience in the lending industry, I have discovered that there are 3 types of customers:

      1) Those that have no clue and want to hire an expert to assist in their lending solutions.

      2) Those that have educated themselves on some aspects of the lending world, and are seeking more information to obtain a business loan.

      3) Those that will never be interested in hiring an expert, and do not have a clue, and want to do all the work themselves no matter what no one tells them.

      In this DO IT YOURSELF manual I will attempt to satisfy all three customers. If you follow this manual step by step, I guarantee, you will be more prepared than you ever have to receive a business loan for your existing business or start up business. NOW LETS BEGIN!

      CHAPTER 1

      LET’S CRAWL!

      Qualifications and Requirements

      “FAILING TO PREPARE IS PREPARING TO FAIL” This quote applies to everything that you may do in life along with obtaining a business loan for your existing or start up business. There is an old saying, “You must learn how to crawl before you learn to walk.” LET’S CRAWL!

      Knowledge and Experience

      Just like any job that you would apply for, you need to create combined personal and business resume for the business you are seeking funding for.

      These are some of the key points you should focus on:

      A)How many years do I have in this industry?

      B)What is my management experience? How many years?

      C)Have I owned or co-owned a business of this caliber before, and if so how long?

      D)Show numbers. Did I increase the profits of the company? Did I save the company money etc.

      E)Make sure you know the depths of the business that you are seeking money for.

      F)Know the history of that industry. You can GOOGLE for a more in-depth knowledge that will “wow” the funding source you are seeking money from.

      Note: It is difficult to state you need money for a Daycare center and your experience is in repairing cars.

      CASH INJECTION

      You must show that you have some “skin in the game.” What I mean by this is how much money you have to put toward your project.

      A)Your lending sources will generally want to see at least a 10 to 15 percent cash injection/ down payment. This percentage is based on the total amount that is being borrowed.

      B)You can use your savings, 401k, IRA or borrow from relatives.

      C)You may have established a relationship with a private investor that believes in your business, and willing take the risk of helping you financially.

      Note: The funding source will not take a 100% of the risk. Why: If you don’t pay the loan back you have nothing to loose. YOU CAN WALK AWAY AT ANY TIME, SKIN IN THE GAME IS VERY IMPORTANT. This shows the funding source how committed you are to making the business work, the more money you are able to put down the stronger your chances are.

      CREDIT

      Today’s market is not what it used to be 5 years ago, you must have a good credit score.

      A)Your credit score must be 650 or higher, this is all three credit bureaus (EquiFax, Trans Union and Experian)

      B)No derogatory items on the credit report. This means no late payments, no bankruptcies, no tax liens, and no foreclosures.

      C)If these items are on your credit report, you will want to have a very good explanation along with documentation to support your case.

      D)Existing trade lines on your report should all have at least a three year payment history that displays no late payments.

      E)Existing trade lines should consist of: Mortgage on a home, or lengthy rental history, credit cards that are 50% or below the limit (This can be but not limited to, department stores, American Express, Visa, Master Card etc.)

      F)For credit restoration you can contact First Stone of Atlanta @ www.firststone.com

      CHAPTER