Loans made against the equity in the underlying asset or business.
Equity loan arrangements may be configured to provide a line of credit or a lump sum payment for businesses. These business credit arrangements typically use the existing equity in a real estate holding to secure the loan, making equity lending one of the safest investments for financial investors. Qualified companies can often pay significantly less in interest charges and fees for equity lending arrangements due to the high degree of collateralization these loans require for approval. As a result, equity loans are often a cost-efficient way to obtain funds or establish a line of credit for a wide range of business operational needs.
Equity lenders typically look at a few factors when considering a loan application. The first is the value of the property to be used as collateral. Equity lending amounts generally cannot exceed 80 percent of the value of wholly-owned properties. For properties or vehicles that are mortgaged or financed, the total amount of debt against the property cannot exceed 80 percent when the new equity loan amount is figured into the existing debt scenario. As a result, a hard lending limit exists for these types of business loans. In some states, land used for certain agricultural purposes cannot be used as collateral for equity loan arrangements. Lending for equity may also be governed by other federal, state and local regulations as well.
CNF Exchange can help businesses identify and apply for equity lending arrangements that can improve cash flows, provide a source of emergency funds and allow for the smooth and uninterrupted continuation of business operations even when financial resources are scarce. By managing business equity loans effectively to benefit the business plan, owners and operators can create a solid foundation for their company's growth and expansion. CNF Exchange can help establish that foundation and create the proper environment for future expansion and growth.
Learn more about business equity loans.