Non-recourse Loans

Non-recourse Loans: The Collateral Loan That Limits Your Liability
A collateral loan is one secured by something that a borrower owns. Usually, when a borrower uses collateral, the lender needs some added assurance that he will receive full payment for his loan. To get that assurance, he asks for an asset, real estate, equipment or a car, for example, that he can claim if the borrower does not repay the debt. The lender can then sell the asset to recover his investment. Looking for  Cruise Loans?

There are two types of collateral loans: a nonrecourse and a recourse loan. Each carries the risk for the borrower that its name implies. Every borrower should be honest with himself about what he is willing to risk for a loan if he cannot repay it.

What is a Nonrecourse Loan?

Nonrecourse loans are collateral loans that give a lender no power to come after any borrower assets beyond the collateral the borrower has offered. This means nonrecourse loans protect borrowers against any further collection efforts, even if the value of the collateral is less than the value of what is owed.

Often the collateral is a house or other property that the borrower has secured money from the lender to purchase. If the collateral is a house, the lender can seize the house if the borrower defaults. One of the concessions a borrower usually makes on nonrecourse loans is the agreement not to use the same collateral for other loans.

Companies that make nonrecourse loans have high capital costs, meaning their fixed expenses that make them operable are high priced, which are different that a commercial loan or a SBA Loan. These companies also have revenue flows that are not constant. The items a borrower may purchase with a nonsecure loan usually have a long loan period. All of these factors spell high risk for the lender, who has more to lose than the borrower. These same companies may also offer accounts receivable loans and hard money lending.

Each state has different laws for determining whether loans can be nonrecourse loans or recourse loans. It is difficult in California, for example, for lenders to pursue borrowers personal assets because California is a nonrecourse loan state. What if the state is a recourse loan state?

Recourse loans are a greater risk for borrowers because of the personal liability involved. If a recourse loan borrower does not repay his debt, the lender can sue him for the remaining amount of the loan. The borrower’s bank accounts can be seized and his wages can be garnished. In fact, the lender can continue to take legal action and come after personal assets until the debt is settled. This could mean years of financial challenges for a borrower.

Why Does a Borrower Seek a Nonrecourse Loan

One of the most common reasons that borrowers seek approval for nonrecourse loans is to purchase investment real estate using a self-directed individual retirement account, or IRA, as collateral. Property purchased this way is considered as another form of retirement investment, and it receives all the tax shelter benefits that an IRA does. It allows self-directed IRA owners to diversify their investments without tying up all of their IRA funds. The IRS requires the financing for these types of purchases to be nonrecourse loans.

Borrowers also get nonrecourse loans to refinance a mortgage for a lower interest rate and a shorter loan period. This is especially true for homeowners who have adjustable rates on their mortgages. They minimize the risk that their rate could increase and their homes would no longer be affordable.

The nonrecourse loan as a refinance option is attractive for other reasons, as well. If a homeowner has two mortgages, the nonrecourse loan allows him to consolidate his loans and make only one payment. Those who already have equity in their homes could use this loan to get cash for other purposes like home improvement or unexpected medical expenses.

A third reason a borrower may seek this type of loan is when he is the plaintiff in a settlement case. The money that a plaintiff, the borrower, receives is an advance percentage of the money that he believes he will receive in the settlement. Many consider this type of nonrecourse loan predatory. Typically, if the plaintiff loses the case, he will owe the lending company no repayment. This is the risk the lender takes with this kind of investment.

However, the reality is that these kind of loans are frequently offered to plaintiffs who do not have great credit or many valuable assets. These plaintiffs take an amount of upfront cash that is small compared to the settlement reward. When the plaintiff wins the case, he has usually given away such a large portion of his settlement that the lender walks away the winner. The plaintiff wins the case, but the lender wins the bulk of the money.

Tips for Securing a Nonrecourse Loan

One of the best approaches to the nonrecourse loan is to shop around. Many borrowers make the mistake of signing for the first loan offer they receive without comparing loan terms with those of other lenders. In some cases, while a loan is in the process of approval, the interest rate drops even more than when the loan process first initiated. Most borrowers do not know they they can still ask for the lower rate. Many lenders will discourage this and respond that the borrower’s rate is already locked. Until the loan is finalized with signatures, however, the rate is not officially locked in.

It is also important to make sure the loan is not a recourse loan. Borrowers should read all the loan terms and know the laws of their states. Borrowers should also know that there have been special circumstances that have allowed nonrecourse loans to be treated as full recourse obligations. Lenders have been allowed to ignore the nonrecourse stature of a loan if the borrower commits intentional acts like fraud or misrepresentation. In these cases, lenders could pursue deficiency judgments against borrowers to recoup losses from defaulted loans. Two recent legal battles in Michigan courts found in favor of the lenders, and this may set the tone for similar cases involving nonrecourse loans.


COmmercial Business Loan Options

Commercial Business Loan Options by phone 1-888-533-3254


We now offer Insurance Commission Loans and Insurance Commission Block of business lump sum buyouts for agents, agencies and Insurance Companies looking to sell their books of business or a block of business.

Equipment Leasing

Equipment Leasing and commercial loans

Application up to $150,000. No financial statements necessary.
Middle market financing up to $500,000
Large ticket over $500,000
Little or no down payment
Numerous payment structures

We can finance almost any type of business related equipment

Approvals for application only in 24 hours. Middle market and large ticket financing usually take 3-5 days. Up to 84 months to repay with excellent rates. These programs are for companies that have been in business for two years or more.
Sale & Lease Back

Many companies need working capital for expansion and do not want to use their bank lines for working capital. We have a program that uses the equity in your existing equipment to give your company the working capital it needs. We buy your equipment and lease it back to you and when all the payments are made you own the equipment again.
Startup Program

Most financial institutions will not finance companies that are just going into business. If your company has just started in business, or has been in business for only a short time, usually less than two years, we can help you grow by financing the equipment you need to be successful.
B, C and D Credits

In these tough economic times many businesses have suffered financially. Additionally, the owners of these companies have seriously damaged their personal credit. We have developed a “second chance” program to help these companies. We can structure your financial needs to help you rebuild your company.
Government and Municipal Leasing

We can provide lease financing to any government or municipal entity with guaranteed approval. The rate is determined by the rating of the municipality or government agency. A partial list of who we finance is listed below:

Federal Government Agencies
Armed Services
State Agencies
Public Schools
Police Department
Fire Houses

The above list is only an example of what we can finance. We can finance any state or federally controlled entity.

Please contact us, so one of our finance specialists can discuss your specific needs and determine how we can arrange the financing your company requires.

Leasing is the right choice!
Leasing is one of the fastest growing ways of acquiring equipment in business today. Recent surveys found that 80% of U.S. businesses, from Fortune 500 to the local family business, lease some portion of their equipment. A growing business often faces the dilemma of limited cash flow and the need to add equipment. Leasing can put the equipment to work for you with real cash flow advantages and without major capital investment. We can lease virtually any type of equipment, including software and installation.

Low monthly payments
The monthly lease payment will usually be lower than the payment required by other methods of financing.

No need to tie up capital
Keep your business’ cash for future needs, unexpected expenses or working capital when revenues are low.

You can always lease equipment — you can’t lease money!
Most types of financing require down payments of up to 25%, whereas leasing covers 100% of the cost of the equipment. Most leases require only one or two payments in advance. Get immediate use of the equipment with minimal up-front cost.

Preserve existing lines of credit
Leasing has no impact on your bank credit lines. Protect your borrowing power for other business needs or opportunities.

Eliminate obsolescence
Technology is changing at a rapid fire pace. What meets your business’ needs today may be obsolete three years from now. Leasing allows you the flexibility to maintain a competitive edge by giving you today’s best technology then allowing you to upgrade when the equipment has outlived its advantage.

Fixed payments through the term of the lease
Unlike bank lines of credit that usually have variable rates, lease payments are fixed no matter what happens in the market. By choosing to lease you won’t be a victim of skyrocketing interest rates. Remember the 80′s when rates rose from 9% to over 20% in one year? That can’t happen with leasing.

Significant tax and accounting advantages
Leasing eliminates the need for complicated depreciation schedules since lease payments are generally line-item expenses on your P&L statement. And since lease payments can usually be treated as a pre-tax business expense you may even reduce your taxes. Paying cash for equipment automatically adds 30-40% to the cost when you realize that cash = profits, and taxes are paid on profits. Leasing is the right choice! It minimizes demands on cash flow, eliminates obsolescence, keeps your bank lines open, saves on taxes and shelters you from the market.
COmmercial Business Loan Options

SBA Loan Program


Purchase – Build – Refinance – Renovate – Owner-occupied

Non-conforming properties
Single-purpose buildings
Gas stations
Repair Shops
Auto Dealerships
Hotels and motels
Convalescent hospitals


Your company’s cash flow & management capabilities are our primary indicators
Up to $1.25 million a year
Up to 15-year term
Up to 80% financing
Loans fully amortized, no balloons
No pre-payment penalty
48 hour pre-qualification


Commercial printing and binding
Machine tools
Manufacturing Equipment
Heavy Equipment
Medical Equipment
Laundry/dry cleaning
Diagnostic Equipment


No cost pre-qualification letters
Competitive rates and flexible terms
No pre-payment penalties
Up to 90% financing
Up to 25-year terms
Fully amortized
Fixed and variable rate options on both 7a and 504 programs

7(a) Loan Program

We specialize in providing long-term permanent financing to small businesses. Our loans, including the 7(a) Loan Program, are made through the Small Business Administration (SBA) guaranteed loan programs.

Eligible Businesses and Property Types Almost any type of for-profit business is eligible for financing. Commercial real-estate must be partially occupied by borrower and includes, but is not limited to, the following types of properties:

Office Buildings
Industrial Buildings
Child Care Facilities
Car Wash Facilities
Automotive Repair
Professional Buildings
Hotels and Motels
Gas Stations
Bed and Breakfasts
Single-Use Buildings

Eligibility based on SBA size standards. Typically, retail businesses with annual sales of less than $6,000,000, manufacturing business with less than 500 employees, and service businesses with less than 100 employees. Eligible businesses include those in retail, manufacturing, and services industries.

Use of Proceeds Real-estate acquisition, construction, or refinance – up to 90% financing available

Business Acquisition – up to 80% financing available

Equipment Acquisition – up to 100% financing available

Debt Refinance -up to 100% financing available

Terms Up to 25 years for real-estate financingUp to 10 years for equipment or business acquisition financingUp to 7 years for permanent working capitalAll loans are fully amortized.

Interest Rates and Fees Interest rates are always market competitive. Fees are generally limited to the SBA guaranty fee and customary closing costs.

Loan Amounts Loan amounts range from $200,000 to $5,000,000
504 Loan Program

We specialize in providing long term permanent financing to small businesses. Our loans, including the 504 Loan Program, are made through the Small Business Administration (SBA) guaranteed loan programs.

Use of Proceeds Real-estate acquisition, construction, or refinance – up to 90% financing available

Equipment Acquisition – up to 80% financing available

Loan Structures Financing available on projects up to $12,000,000.

Our friends and partners typically provides a first mortgage of up to 50% of the total loan-to-value. This loan can range from $100,000 to $3,000,000.
The SBA, through a Community Development Company (CDC) provides up to 40% loan-to-value in a second lien position. This loan can range from $100,000 to $5,000,000.

Terms and Interest Rates First Mortgage – up to 25-year term for real-estate loan and up to 15-year term for equipment purchase with fixed and variable interest rates available.

Second Mortgage – up to 20-year term for real-estate and up to 15-year term for equipment purchase. Fixed rate is determined at SBA guaranteed 504 debenture sale.

Fees First Mortgage – fees are always market competitive.

Second Mortgage – 2.75% + legal review fee. This fee is financed in the loan.Fees also include customary closing costs, construction loan fees (if applicable), and bridge fees.
Eligible Properties

Almost any type of for-profit business is eligible for financing. Commercial real-estate must be partially occupied by the borrower.

Insurance Agency Loans and Insurance Commission Lump Sum Payouts

COmmercial Business Loan Options Commercial Business Loan Options by phone 1-888-533-3254

Accounts Receivable Financing

Accounts receivable financing, or Factoring, is the purchase of accounts receivable invoices at a discount. If you sell your products or services to businesses that pay in 30, 60, 90 days or more, our providers/advertisers  has a liquidity solution for you. We can finance companies that are start-ups, losing money, or in bankruptcy because accounts receivable financing is based on your customer’s credit, not yours. This is not a “debt.” You are selling an asset. But it is more than just an asset sale; it is like outsourcing your accounts receivable department. Factors provide valuable services. They check your customer’s credit for you and notify you of bad risks and they provide detailed monthly statements. Qualifying accounts even get free credit insurance.

Cash in 24 hours
No personal guarantees
We finance any type of business
No recourse even if the account does not pay
Credit insurance on your clients at no cost to you
No arbitrary loan board decisions
No Fixed Payments
As sales and receivables increase, funding Increases
Focus on your business, not collections
Take advantage of early payment or bulk purchase discounts from your suppliers
Ability to service large and / or unexpected orders
Accounts receivable financing is more flexible and quicker than bank loans

Use The Money To:

Fund payroll or other operating expenses
Purchase inventory to take advantage of bulk/early payment discounts
Fund expansion and growth
Respond to seasonal demands and opportunities
Take on that large new account with confidence

We even have a special INSURANCE COMMISSION LOAN option for Agents and agencies