Thinking of Making the Jump to a Remote Office? Look Before You Leap.

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Why Being In The Same Room Can’t Be Duplicated I’ve read the headlines for years about the coming age of the remote workplace.  It keeps cars off of congested roads, gives overburdened workers flexibility, and provides work-life balance to a generation that craves it.  What could possibly go wrong?  As it turns out, lots of things can and do go wrong. Don’t misinterpret me, I love the technology that enables the remote office.  E-mail and cell phones have been around for years, but recent advances in cloud computing and video-conferencing make physical preference pretty negligible from a technical perspective.  But … Read More

Desperation Can Bring About The Best Solutions

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I’ve been part of an organization called Young President’s Organization for some time–for over nine years now, and we get regular email communications on a daily basis, various deals and what not, and one day, I got one about someone who wanted to finance their commercial real estate. I responded and kicked off a nice conversation with this future borrower of mine. He provides, basically, the extracurricular activities at very high-end resort properties like The Greenbrier, Hershey Hotel and the Gasparilla Inn in Boca Grande, Florida, places like that. And so, he had an opportunity to buy his office building … Read More

Fast Track 504 Part 1: What Is It?

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About a year ago, we launched what we call a Fast Track 504, which is a wholesale program–a secondary market program–meant for banks, credit unions, non-banks, commercial mortgage brokers, all to participate in outsourcing 504 first-lien loans to us to finance. In return, we actually pay them non-interest income premiums based on the yield spread based on increasing the spread over the index we use to factor the interest rate. It’s modeled after things that have existed in the 504 marketplace for decades, but it’s a different spin. We have a broader credit box than a lot of folks out … Read More

How Do I Know What I Am Able to Afford?

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I got a phone call the other day. Actually, I sent an email to this business owner who I had met probably three or four years ago.  We were talking a year ago about how he wanted to eventually own his property. I gave the advice I’ve given at other times: prove your concept first and come back to me in the future. There’s always time to own your own commercial property. and it makes great wealth creation sense for you. I put a ticker on my calendar and I reached out to him by email and he called me … Read More

How Do You Feel Helping People with Wealth Creation?

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I get asked that question a lot: Why do I do what I do and how does it make me feel? I know that the financing that we provide, often called smarter financing, is very impactful for these business owners when they buy a piece of property for what they’re currently leasing. It could be half a million to a couple million dollars–whatever the case is, it makes a material impact on that business owner’s net worth and, in some cases, I’m sure it’s going to last generations. I think it’s terrific. I used to be a management consultant. I … Read More

How Long Does Fountainhead Take to Close a Loan?

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Most commercial real estate contracts, when you want to go and buy a commercial property, are made for 60 or 90 days to close. Oftentimes, with a 30-day financing contingency, our average closing from start to finish–from when I talk to a business owner to the time we’re at the closing table–is about 45 days. The fastest we’ve done with an SBA 504 loan is 26 days but we’re, frankly, a lot of times in that 40-45 day range–more than sufficient for any commercial real estate contract.

The Top Reasons Why People Choose SBA 504 Loans

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The top three reasons why somebody chooses an SBA 504 loan: Number one, the down payment. It’s oftentimes half to a third the down payment of an ordinary conventional bank loan. Number two, the amortization. Oftentimes, we’ll do a 25-year amortization on the first lien loan and a 20-year amortization on the second lien loan–that compares to a 15-20 year amortization with a conventional bank loan. Number three, which I often call the best-kept secret in commercial financing, is the below-market long-term fixed interest rate of the second lien loan, the piece that the SBA guarantees is the best-kept secret … Read More

Why Do Commercial Mortgage Brokers Enjoy Working with Fountainhead?

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Commercial mortgage brokers love to work with us for a couple reasons. We are fast; I think we are the fastest in the industry. In an era where banks and credit unions take weeks to make decisions, we make them in hours. We are extremely knowledgeable. You’d be hard-pressed to find a more knowledgeable group in SBA financing than our management team. The last piece, which I think is really critical, is they can make up to four points of premium from us on multi-use properties, three points on special-use properties, and we tell people the truth which is really, … Read More

What Is the Best Kept Secret of Commercial Real Estate?

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I’ve said for many many years the best kept secret of commercial real estate financing is the SBA 504 loan and the reason for that is the third reason why people would use an SBA 504 loan is the below market long term fixed interest rate on that SBA guaranteed second lien loan. Ok you have 2 loans under a SBA 504 structure you have generally 50 percent of the total project first lien loan and then you have a second lien loan often times it’s 40 percent of the project depending if it’s a special purpose property or start … Read More

Who Can Benefit Most from the SBA 504 Loan?

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The people who benefit the most from SBA 504 loan, our specialty, are small businesses, all the way up to mid-sized companies. We’ve recently closed a loan for a $100 million general contracting company–so we go from that extreme, all the way down to a franchise startup. For a lot of our clients, their annual revenues are in the million to $10 million range, so it’s all over the board really. But the key is, we’re financing commercial real estate for wealth creation for that business owner and that’s what’s really important. We’re taking somebody, in most cases, that was … Read More