Hard Money Lenders: Close More Deals

FOR IMMEDIATE RELEASE
Cherry Hill, New Jersey, United States of America (Free-Press-Release.com) September 19, 2010 -- Remember "You got your chocolate in my peanut butter"? They went great together then and still do! Hard Money Lenders are finding that Financial Guarantee Bonds go great with their loans, enabling more deals to close – everybody wins.

Financial Guarantee Bonds are surety bonds that guarantee the obligation of the borrower; they are issued to protect the interests of the creditor. The Surety adds their financial strength to the transaction thus enabling the borrower to qualify.

It’s such an obviously good idea. So why are these instruments not routinely used? The problem is on the surety (supply) side. Most surety bond providers lack the underwriting capabilities and capacity for these complicated transactions which can range from $25 to $250 million each. Since the market is so limited, Hard Money Lenders are not even aware that such bonds exist.

The opportunity to use a Financial Guarantee Bond arises when the credit applicant is evaluated. They are just short of the required ratios. Or maybe the term of the obligation is beyond the lenders comfort zone. These are deals the lender believes in, but the transaction needs some help to close. Here is the flow:

1. The wise HML has already made contact with the surety and understands the key role they play.
2. The HML has a loan that will not close in its current form. It is a good deal but additional support is needed.

3. The surety is contacted and some initial info is submitted such as the term sheet, a business plan, and other descriptive material.
4. If not done in advance, the surety provides info regarding the Financial Guarantee Bond so the HML can confirm the suitability of the guarantee instrument.
5. After passing the “sniff test,” the applicant submits the Bond Application and complete loan underwriting package to the surety to gain approval of the bond.
6. The surety bond is reviewed / approved in advance by the lender, and may be filed when it is paid for at the closing – Done Deal!

Surety Bonds issued in this manner give lenders the confidence of knowing an additional responsible party stands behind the loan obligation. Now more than ever, Financial Guarantee Bonds go great with Hard Money Loans.

The IBCS Group, Inc. is the Authorized Risk / Claims Manager for the Scarborough Bond and Guarantee Program. The surety issues Financial Guarantee Bonds that can be used on a variety of transactions, in substantial amounts. Contact Steve Golia at 856-673-4135 for further info. IBCS.com

Edmund Scarborough     financial guarantee bonds     hard money loans     hml     IBCS group     steve Golia     surety bonds     tip top