 |
|
|
|
|
|
|
|
|
|
Strangely, your profits will increase as will you return on assets.
Profitability
will increase because you will have the funds to reinvest in
your business rather than taking on additional debt.
For
example, presume that you have a commercial mortgage note on a factory
building that you sold for $250,000. You
got a down payment of $50,000 and you took back a private mortgage note or
contract for deed in the amount of $200,000 at 9% interest over ten years.
Two years have passed and the principal balance is now $172,934.
You wish you had that money to buy a new piece of equipment.
The machine would pay for itself in two years, plus the profit from the
new product would greatly increase your bottom line.
You have a lot of money tied up in that mortgage, but the cash flow
(principal and interest) on that note is only $2,533 per month and you need
$150,000 for the new machinery. It
would take six years to get that much from the mortgage note. If only you had
that money now.
You
could borrow the $150,000 from the bank, but they want your first-born child
plus 8% interest to finance the equipment.
And that means taking on more debt.
This
is where Capital Funding of America provides the solution.
Let’s say we are looking for a yield of 11%, and will purchase your
note for $161, 284. That means
you will be paid $161, 284 in one lump sum.
This also means that you can pay cash for the machinery, and also have
over $11,000 in your pocket.
If you recap the benefits of selling your note, it would look like this:
No new debt to grow your business.
Receipt of $272,076 from the sale of your building ($50,000 down payment; 24 monthly mortgage payments equaling $60,792; $161,284 from Capital Funding of America for the note purchase.)
Greater profits from the products manufactured by the new machinery.
No concerns whether the buyer of the building will make the rest of mortgage payments.
An
additional $11,000 in cash to use as you wish.
This type of results can be achieved with just about every cash flow asset. Your situation may differ, but the general concept remains the same. For more about these transactions and related situations, please contact Capital Funding of America at 1-800-322-5985 to speak to a Client Services Agent or use this link to our CONTACT US page.
