Is Your Client or Project An “A”?

In today’s lending world, there doesn’t seem to be too many “A” rated clients. Every transaction is full of challenges: too little collateral, clients without enough funds, or clients who just don’t have the ability to demonstrate that they are of the highest caliber. However, those A rated clients and projects do exist.

If you go back to your finance class, rule number one was “the bigger the risk, the bigger the reward". The “risk” for a lender is a default, and the “reward” is the interest rate that is charged to the client. In today’s world, it’s not un-common to see rates in the double digits as a result of the risk associated with the client or the project. However, if you have a client that is demonstrably an “A” rated client, the reward, based on finance number rule number one should indicate a much lower rate: some times as low as 1.5% currently.

What constitutes an “A” rated client in today’s world? The short answer is that the project and/or client’s project is secured by collateral that is “cash backed” and “callable at the counter”. In short, the loan is almost being lent for the equivalent of cash. Some of those clients that may qualify for the “A” rated designation might include: major banks, insurance companies, Fortune 1000 companies and other large firms, municipalities, and other substantial institutions.

If you have a client that is A rated, you have an opportunity to provide a rate of somewhere around 2% currently. The funding is pretty liberal as far as its usage, since it’s virtually perceived as cash: there are usually no covenants or restrictions on the use of funds as well. Some of the funding uses might include:

Project finance, working capital, start ups
Commercial Construction & Development
Corporate Acquisition, expansion, divestiture, and downsizing
Purchase & maintenance of fixtures, furniture, equipment, inventory, machinery, and physical plant
Construction & development of infrastructure and non-lethal military projects*

*This funding will not be permitted for unlawful purposes, purchase of weapons, ammunition, munitions, lethal military combat equipment, combat vehicles, or combat aircraft. Funds may also not be used for “roll programs”, high yield programs, or trading programs. Funds may also not be used for use in unlawful activities including the purported buying, selling, leasing, and/or trading of guarantees and/or fraudulent “prime bank instruments”.

There are a number of structures available for this financing, and, as mentioned above, the use of funds is very forgiving since there are no covenants associated with the funding. Should you have a client that might be considered an “A” please contact us, so we can provide them access to probably the cheapest interest rates they can find: both you and your clients will be glad you did. For information regarding the procedures, rates, and other information, contact us at: commercialfundingsolution@gmail.com or (916) 730-4200.