Asset Based Lending: Unlock Your Mortgage Alternative
Despite low home prices, some of the lowest interest rates in history and even a generous recent tax credit, it’s hard to find anyone getting excited at the prospect of applying for a mortgage these days.
Battered by high default rates, record foreclosures and increasing capital reserve requirements, lenders are being ultra-cautious when qualifying new borrowers.
Borrowers who are unable or unwilling to satisfy today’s tighter lending requirements are faced with 2 choices: paying cash or foregoing their decision to purchase or invest altogether.
With the Asset Based Lending program, Chicago Bancorp clients enjoy a third, more powerful alternative.
Chicago Bancorp’s asset based loan is a powerful tool that allows qualified borrowers to leverage their publicly traded assets for cash that can be used for any purpose. Among the benefits:
- Fixed interest rates between 2.5% and 4.5%
- Interest Only quarterly loan payments
- No income or credit criteria
- No closing costs, banker or transaction fees
- Turn times of 2-4 weeks, from term sheet to funding
- Loan terms of 3, 5, 7, or 10 years
- Funds that may be used for any purpose, including real estate purchases, renovations, business expansions and more
- Loans available for up to 80% of the securities’ value
- Borrower retention of all dividends and upside market appreciation of the securities
Chicago Bancorp clients have used this innovative product to meet a variety of financing challenges:
When a client needed to refinance a commercial loan for a real estate development project, Chicago Bancorp worked with the developer to pay off the existing lien and use the security for our collateralized repurchase agreement. The borrower received a much higher Loan-to-Value along with a lower interest rate.
Loan Amount: $2,725,000 / Interest Rate: 3.25% / Term Sheet to Funding Time: 2 Weeks
Another client was buying a foreclosed property from a bank and needed funding in two weeks or less. Traditional funding was not available for this borrower, but the Asset Based Loan provided a solution. The borrower was a Special Needs Trust and pledged mutual funds and Exchange Traded Funds (ETFs) as collateral.
Loan Amount: $505,000 / Interest Rate: 3.75% / Term Sheet to Funding Time: 9 Days
A business owner was refinancing a commercial loan and was unsatisfied with the terms offered by his bank of 20-plus years. This borrower had a portfolio of a wide range of many different individual stocks.
Loan Amount: $627,000 / Interest Rate: 4.00% / Term Sheet to Funding Time: 2 ½ Weeks
The Asset Based Loan is an example of Chicago Bancorp’s longstanding commitment to providing trusted, reliable solutions to address the widest range of client financing needs, from first-time homebuyers to seasoned investors.
For details on our Asset Based Loan program, click here or contact me direct at 312-738-6253.
