~10 – 15%
90%
Your business may have a strong opportunity even when a bank is not prepared to provide the required financing. When a business owner or corporation has equity in real estate, a second mortgage may provide access to capital without requiring the property to be sold or the existing first mortgage to be replaced.
Green Light Money Services Inc. assesses property-secured business financing for expansion, equipment, inventory, acquisitions, renovations, bridge financing and other legitimate business needs. Indicative rates may begin at approximately 10% to 15%, depending on the property, loan-to-value ratio, security position and overall transaction.
A second mortgage is a loan registered against a property behind the existing first mortgage. The first lender maintains its priority. The second-mortgage lender advances additional capital based primarily on:
Because the second lender accepts a lower security position, the rate is normally higher than the rate on a conventional first mortgage.
The amount is based on the available equity and the lender’s maximum permitted loan-to-value ratio. For example:
This example is only a calculation of potential equity. The actual amount depends on the appraisal, property, lender and complete transaction.
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A current appraisal or other reliable valuation may be needed.
A lower combined LTV usually represents less risk and may improve the proposed terms.
Residential, commercial, industrial and mixed-use properties may be assessed differently.
The requested financing should have a clear business purpose.
The borrower should explain how the second mortgage will be repaid—for example through business cash flow, refinancing, a property sale, contract proceeds or another confirmed event.
Seven purposes account for most of the property-secured financing we arrange.
Possible when the property has substantial equity, the requested loan-to-value ratio is conservative and the repayment strategy is clear.
When the LTV is high, the property is difficult to value or sell, the loan is urgent, credit issues are unresolved, the market is limited, the legal structure is complex, or the repayment plan is uncertain.
The rate is only one part of the transaction. The term, payment requirements, fees and exit strategy should also be considered.
No. Credit remains relevant, but property equity and the repayment strategy may be more important than under conventional bank underwriting.
Definitely. However, the transaction depends on ownership, available equity, the existing mortgage and applicable lending requirements.
Usually not. A second mortgage is registered behind the existing first mortgage.
An initial assessment may be possible within 24 hours when the property and financing information is complete.
Tell us the estimated property value, current mortgage balance, required financing amount and business purpose.
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