nicoleferguson
10-04-2005, 07:41 PM
I am COO for a direct commercial lender and have been working on a client for over 2 months. In a nutshell, here's the situation:
Borrower owns 3MM warehouse in Livonia, MI. Took out a commercial loan with Comerica approximately 4 years ago for 1.8MM. Remaining balance is 1.2MM. Comerica has called the loan due. His mid credit was about a 600-610 when it was run about 2 months ago.
The issue is that this guy is showing negative cash flow all over the place. Granted, he's secured some significant new business, but it's not enough to put our loan committee at ease. I've gotten a approval if he agrees to cross collateralize his home, but he refuses. He also wants no prepay, because I'm quite certain he's trying to unload the building as soon as he can. Our prepay is 5 years, so he's not budging. I'm thinking hard money is his only option left, because typically they'll come due in 12-18 months anyways. This should be enough time to let him dump the building. If I could get this up to a 65% LTV, this should be enough to pay off Comerica and leave enough left over to purchase materials. Furthermore, this would still leave about 1.05MM of equity left in the building.
This guy also has a plethora of other assets, including an auction value of over 1MM of equipment that he owns outright.
Making the situation worse, there's talk of needing a Phase II, which we've been told may cost up to 100K. His family has owned the building forever, and there's never been one done. I highly doubt this guy has this kind of money to pay out of pocket without a guarantee of financing.
Ultimate goal: Pay off Comerica and cash out as much as possible. Borrower needs the money to purchase the materials to complete purchase orders.
Any thoughts and ideas would be most welcomed! Please... Do not waste my time if you are some joker who can't make this happen and is looking for future business. Serious responses only!
Please contact me immediately at: 248-698-1377
Regards,
Nicole Ferguson
Borrower owns 3MM warehouse in Livonia, MI. Took out a commercial loan with Comerica approximately 4 years ago for 1.8MM. Remaining balance is 1.2MM. Comerica has called the loan due. His mid credit was about a 600-610 when it was run about 2 months ago.
The issue is that this guy is showing negative cash flow all over the place. Granted, he's secured some significant new business, but it's not enough to put our loan committee at ease. I've gotten a approval if he agrees to cross collateralize his home, but he refuses. He also wants no prepay, because I'm quite certain he's trying to unload the building as soon as he can. Our prepay is 5 years, so he's not budging. I'm thinking hard money is his only option left, because typically they'll come due in 12-18 months anyways. This should be enough time to let him dump the building. If I could get this up to a 65% LTV, this should be enough to pay off Comerica and leave enough left over to purchase materials. Furthermore, this would still leave about 1.05MM of equity left in the building.
This guy also has a plethora of other assets, including an auction value of over 1MM of equipment that he owns outright.
Making the situation worse, there's talk of needing a Phase II, which we've been told may cost up to 100K. His family has owned the building forever, and there's never been one done. I highly doubt this guy has this kind of money to pay out of pocket without a guarantee of financing.
Ultimate goal: Pay off Comerica and cash out as much as possible. Borrower needs the money to purchase the materials to complete purchase orders.
Any thoughts and ideas would be most welcomed! Please... Do not waste my time if you are some joker who can't make this happen and is looking for future business. Serious responses only!
Please contact me immediately at: 248-698-1377
Regards,
Nicole Ferguson