A no FICO, foreign investor require $1b, LTV=50%. Where can I find lender/equity participants for this amount? What are their usual terms and conditions?

I have heard about broker/lenders who promise the money, take their fees and never show up. How can I verify if they are genuine?

You can't just say "need $1B at 50% LTV" and expect to get many direct answers. What is the collateral, use of funds, location, and how did you find this deal or how did this deal find you?

The last question is just out of curiousity as this is always the main concern of lenders when deals of this size are being presented by people who do not know where to go to get this type of deal done. I'm not saying you will not be able to get it done, just that it is usually unlikely that it will happen.

The first three questions are important to any lender since we all have our different niches regarding collateral types, LTV's, debt or equity financing and geographical restrictions.

Perhaps you could tell us more about the deal and then, whoever is capable of handling this project, will be more than happy to reply.

The one thing that I did get a chuckle out was that the first thing listed was that the investor had no FICO. As if this would be something that would be important on a deal this size.

Sorry, I did not mean to chuckle, but BigWorm is right. It is far more important to know

What?
Where?
How?
Why?
When?

Well, what I do is first I say NO to up front fee's!
............(too many straight up companies out there that don't charge). They know their business.
They will ask you for a Financial Statement and other documents.

If they can't do the loan they will tell you and not have to worry about wasting their time.
Some take the money, to justify wasting their time and have eventually wasted your time.
If you have a validated request. They may ask for you to pay appraisal fee's etc. DON'T GIVE THE MONEY TO THEM!!!
You don't have to give the money to them ever. Have a escrow You give the money to the (already checked out) direct person funds through the escrow. And not their escrow. aka: Their pockets.

Watch out for "RED FLAGS".

If you are desparate, the unsavory, will smell it and begin to request money.

2. I say NO! ..... then I verify that they are who they say they are.
3. They must have a tangible address. Not one where they move every 3-6months.
4. Ask for references.....if they are no good, you will never hear from then again.
5. Never give out personal information, to people you don't know. Verify.
And like they said in the other post, if you are doing that kind loan amount, FICO's aren't a concern.
Financials, the project, cap rate, projections etc.

It's the transaction and a lot of variations, from transaction to transaction.
Get a Confidentiality Agreement. If they won't sign or want to give you theirs. Read it carefully. Then if you don't like theirs, go back to yours!!

You can always amend yours or theirs, so that they are not one sided.

I just had to reply to this. As someone who works in venture capital, let me offer you some advice: just walk away from this and save yourself a lot of useless effort and dissapointment.

Let's assume for the sake of argument that this is real:

If you are trying to shop this yourself there is no one that will take this seriously. By the terms used it is obvious you are a mortgage LO. My guess is there is at least one other "broker" attached to this and who knows how many are in the broker chain - but maybe not. The first thing the investor or lender will tell all of you is that you have to get out of the way as they will only deal with the principle. The best that can be hoped for is a referral fee - which is not unreasonable for no more effort than picking up the phone or emailing to pass information along.

Again, if this is real and the principle has 50% equity or collateral attached to this project, the question is then why is the principle not approaching the financial contacts he/she has used in the past. If the principle's reply is this is the first time doing this - again, you need to walk away as no one will give a billion dollars to an inexperienced entity. It could also be that the entity is so heavily leveraged that they can not get any more money. This tells you they are a bad risk and are cash poor. You don't want this from someone asking for a billion dollars.

If you have contact with the principle tell them to forward the executive summary. This will show the outline of the project, their background, pro forma, use of funds, draw, etc. And this is just a drop of water in the ocean. Again, if real, a project of this magnitude is years, not months, in the works. If they don't have this or they say they're waiting to get the money in order to put the plan together, again, walk away as this is not real. No one lends money to an entity that can't even show a plan for the funds.

Oh, and by the way, we consider credit history a "deal breaker". If the prinicple(s) can not show sufficient wherewithal to obtain even a home or car loan, there is no way in the world we will finance millions of dollars to a project to someone who has proven incapable of managing even small funds.

In regard to fees - I believe the other poster/you were referring to upfront fees by other brokers. By all means the prinicple should be prepared to pay the lender's or investor's cost of financing. If you don't believe me, try picking up the phone and calling Textron (as just ONE example). Also, dont' believe a lender will bend over backwards to sign your ncnd or is just dying to get their hands on your project. They get presented with a million items a day and if a downline broker starts to become difficult this is just an indication that there will be problems down the line and they may drop it so as not to deal with the hassle. Ask them if they pay referrals as you're more likely to be paid a referral fee by the lender/investor than you are by the principle.

This is not meant to be harsh - but you should know what and who you're dealing with.

Good luck.

I have never underwritten anything over $90MM where we were the lead. On the other hand, I have done the underwriting for pieces of much larger deals where we were only a participant. Honestly at that level the FICO of the principal while it could be a concern, it is not something we can’t get over or a “deal breaker”.

Please do not confuse financial strength with a FICO score. Two different things. My employers have had, through the years that I have worked in this field, several well known Millionaires. Including a couple that are nationally known. I remember going over the credit report for one where his Equifax credit score was 200 points lower than mine. The main reason was that, he only had 3 open accounts.

On the other hand his PFS showed a tangible net worth of more than $200MM.

FICO in that case means very little to me.

I am not confused on anything.

As indicated in my first message, I am speaking from a venture capital perspective, not debt based, collateralized commercial lending.

VC has a much higher risk associated with it as there is no collateral other than the future profits in which the investor participates.

Credit history, not "FICO" is indeed a significant issue. Someone such as yourself who is unfamliar with this industry should not take it upon themselves to define or explain qualifying criteria.

An individual or entity with a list of failed ventures, defunct LLC's still showing debt, bankruptcies, etc, would be assessed as a poor risk and not given a second look.

Penny:

The name of the site is "Loanuniverse, Commercial loan advice"

I might be unfamiliar with your industry, but I am just like you giving my pov.

I am not stating "point of view", I am stating facts.

Ufamilarity with an industry can be detrimental when attempting to guide someone - as you are attempting to do. Especially to the original poster who clearly has no idea of what they are working with.

Penny:

I have only claimed to be familiar with my own industry. As such, I am giving my pov based on my experience. I know that there are other places where borrowers can get millions other than through a commercial bank. I will let others speak about those as I am not familiar with them.

In my world, the FICO {which is a number derived from credit history}is not that important when dealing in millions. In yours, that particular score seems to carry more weight. When looking at the person behind the project, I am looking at the experience, financial strength, and liquidity first. Yes I am looking also at his credit report, but if he shows only two accounts and one of them is his luxury car lease where he has been late a couple of times and as a result his credit score is 620. I am not going to give it as much weight as having $5MM in deposits in our institution.

I think I struck a nerve when I wrote earlier “Please do not confuse financial strength with a FICO score”. While that statement was blunt, I am trying to tailor my response so that is relevant to the original poster. His first sentence started with “A no FICO….”

I also think that your definition of “credit history” might be broader than mine. You also seemed to assume that others such as myself work in your industry and that somehow we are giving our 2 cents from that perspective. That assumption would be incorrect. If you read through my numerous posts, I have never claimed to be more than what I am. A credit guy with 10 years of experience in commercial banking.

I stand by my responses including the first one. The way we approach RE deals {I am assuming this is RE since the original poster quoted an LTV} is very project specific. The important thing to know is the

What?
Where?
How?
Why?
When?

Of the project. The project has to stand by itself.



By the way, what exactly do you do in venture capital?

To whom it concern

I represent a group of private investors that finance JV partner.