Loan Marketplace
Funding Wizard®
Loan Marketplace
Loan Marketplace leverages technology to match borrowers with lenders.
Loan Marketplace Process:
The loan marketplace replaces the traditional loan placement process which relies on manual Request For Proposals (‘RFP’), sent by borrowers to local lenders. The Funding Wizard® relieves borrowers from soliciting loan quotes, compiling spreadsheets to compare them, and answering the same questions multiple times. Instead, the platform provides borrowers with competing term sheets that are easily comparable. Borrowers also receive quick assessment of the maximum loan amount and the expected terms.
Is Your Deal Financeable?
Before engaging with lenders, have our transaction team review your company profile and financing request.
Based on your company profile, our professionals will estimate debt capacity, cost of capital, and repayment terms.
Debt Placement Innovated
The Funding Wizard® platform combines loan matching technology with experienced deal team to connect borrowers and lenders. The proprietary search algorithm finds the best loan while the deal team keeps the process on track from start to funding.
One Loan Application
Complete one loan application and save time by answering questions once.
Diverse Lender Network
Match with large network of lenders, including banks, non-banks, mezzanine lenders, and others.
Term Sheet Comparison
The Funding Wizard® features competitive bidding process and standard quoting technology, which enables side-by-side comparison of all loan offers.
Closing Support
Predefined process, automated follow up, and dedicated deal team eliminate surprises and get you through a smooth closing process.
Experienced Deal Team
KFS deal team professionals have decades of middle market and banking experience. The team presents your business in the most positive light and facilitates the debt placement process.
Funding Wizard®
Loan Marketplace
Pays for Itself
Funding Wizard® Loan Types
The sources for corporate loans and real estate loans are diverse. Numerous bank and non-bank lenders with various credit criteria, investment horizons, and return expectations, offer capital to commercial borrowers. The Funding Wizard® continuously updates its database with credit terms in the market, so that corporate and real estate borrowers can find the best loan.
Corporate Loans
A term loan is a monetary loan that is repaid in regular payments over a set period of time. Interest rate may be fixed or floating.
- Purpose: Expansion, dividends, buyouts, refinancings, etc.
- Typical Collateral: All asset lien, real estate, equipment, other fixed assets
- Term: 1 – 10 years
- Amortization: 3-7 years
- Grace period (interest only): 6-12 months
- Pricing: Prime rate plus 0%-2%
- Loan size: $1 Million to $100+ Million
A Line Of Credit (‘LOC’) is a preset amount of money that a lender has agreed to lend a borrower. The borrower can draw from the line of credit when it needs cash, up to the maximum amount. In a Revolver LOC, money can be borrowed again after it was repaid. Interest is charged only on the amount borrowed.
- Purpose: Working capital (inventory, receivables), cash flow management, etc.
- Typical Collateral: All asset lien, inventory, receivables
- Term: 1 year (renewable)
- Amortization: none
- Interest: Monthly
- Pricing: Prime rate plus 0%-2%
- LOC size: $1 Million to $100+ Million
A bridge loan is a short-term loan used until the business secures permanent financing, sells an asset, or removes an existing obligation. It allows the borrower to meet current obligations by providing immediate cash flow. Bridge loans are short term, have relatively high interest rates and fees, and are usually backed by some form of collateral.
- Purpose: Temporary finance
- Typical Collateral: Real estate, inventory
- Term: Up to 3 years
- Amortization: none
- Grace period (interest only): 6-12 months
- Pricing: Prime rate plus 3%-6%
- Loan size: $1 Million to $100+ Million
Factoring is a financial transaction in which a business sells its accounts receivables to a third party (called a factor) at a discount. Businesses use factoring as short-term borrowing in order to meet immediate cash needs. Factors often charge higher interest rate and require more documentation and administrative work (e.g. assigning invoices, informing customers of the factoring arrangement) than Line of Credit (‘LOC’) financing. Therefore, the loan marketplace platform will also try to match factoring borrowers with Line of Credit funding solutions.
- Purpose: Short-term borrowing, cash flow management
- Typical Collateral: All asset lien, receivables sale
- Term: 1 year (renewable)
- Amortization: none
- Interest: Discount at inception
- Pricing: 10%-15%
- LOC size: $1 Million to $100+ Million
Leasing is financing arrangement in which one party (‘lessee’) agrees to rent property owned by another party (‘lessor’). It guarantees the lessee use of an asset and guarantees the lessor regular payments for a specified period in exchange. In a Leasing transaction the lessor owns the asset, which reduces lending risk, and also reduces lessor’s tax liability through depreciation expense. These benefits are transferred to the borrower through lower interest rate.
- Purpose: Equipment and real estate financing
- Typical Collateral: Lessor is the owner of the asset
- Term: 3 – 30 years
- Amortization: 3 – 30 years
- Interest: Monthly
- Pricing: Varies
- LOC size: $1 Million to $100+ Million
A property is considered owner-occupied when 51% or more of the property’s space is occupied by the owner’s business, and the owner pays at least 51% of the rent. The collateral for owner-occupied loans is the real estate. The loan is repaid with cash flow generated by the business operations, and rent collected from other tenants.
Lenders consider owner-occupied loans as lower risk, because the owner is committed to the property, both as the landlord and a major occupant, and because the business’s cash flows support debt service payments.
- Purpose: Acquisition, expansion, dividends, buyouts, refinancings, etc.
- Typical Collateral: First mortgage on the commercial property
- Term: 5 – 20 years
- Amortization: 15-25 years
- Grace period (interest only): None
- Pricing: Prime rate plus or minus 0%-2%
- Loan size: $1 Million to $100+ Million
Real Estate Loans
A construction loan is a short-term loan used to finance the building of a real estate project. The developer takes out a construction loan to cover the costs of the project before selling the finished real estate, or obtaining long-term financing. Since they are considered relatively risky, construction loans usually carry higher interest rates.
- Purpose: Construction of real estate project (residential, commercial, industrial)
- Typical Collateral: Real estate
- Term: Project length, extendable
- Amortization: none
- Grace period (interest only): during construction
- Pricing: Prime rate plus 1%-3%
- Loan size: $1 Million to $100+ Million
Land loans are used to finance the purchase of vacant land or land with uninhabitable structures. Land acquisition loans tend to be riskier for lenders than loans collateralized by completed real estate assets. As a result, interest rate is a little higher and loan-to-value is around 75%.
The Funding Wizard® is able to prequalify the borrower for a maximum purchase amount before a specific property is identified. Once the property is selected, the lender will underwrite the selected property.
- Purpose: Land Acquisition
- Typical Collateral: Real estate (land)
- Term: Short, often 1 year, extendable
- Amortization: none
- Grace period (interest only): until maturity
- Pricing: Prime rate plus 1%-3%
- Loan size: $1 Million to $100+ Million
Real Estate bridge loans are a short-term loans used until long-term financing can be secured for the commercial property. They allows the borrower to meet current obligations by providing immediate cash flow. Bridge loans are short term, have relatively high interest rates and fees, and are usually backed by some form of collateral.
- Purpose: Temporary finance
- Typical Collateral: Real estate
- Term: 6-24 months
- Amortization: none
- Grace period (interest only): until maturity
- Pricing: Prime rate plus 2%-5%
- Loan size: $1 Million to $100+ Million
Permanent Loans are term loan with first mortgage on the commercial property. The loan is repaid in regular payments over a set period of time. Interest rate may be fixed or floating. Term is at least 5 years and the loans often amortize over 20-25 years, depending on property condition. Permanent loans are less risky to the lender because the property has already been constructed and almost completely leased out. As a result, permanent loans charge lower interest rate than other real estate loans. The Funding Wizard® includes permanent loan quotes from life insurance companies, banks, credit unions, and other lenders.
- Purpose: Expansion, dividends, buyouts, refinancings, etc.
- Typical Collateral: First mortgage on the commercial property
- Term: 5 – 20 years
- Amortization: 20-25 years
- Grace period (interest only): None
- Pricing: Prime rate plus or minus 0%-2%
- Loan size: $1 Million to $100+ Million
A takeout loan is a loan that is used to replace a previous loan. More specifically, a Takeout Loan, is a Permanent Loan that the lender promises to provide at a particular date or when the project is complete. Takeout loans are commonly used in property development. A developer might secure a Land Acquisition Loan to buy the property, a Construction Loan to finance the building of the project, and a Take Out Loan once the project is complete, to pay off the Construction Loan.
- Purpose: refinancing
- Typical Collateral: First mortgage on the commercial property
- Term: 5 – 20 years
- Amortization: 20-25 years
- Grace period (interest only): None
- Pricing: Prime rate plus or minus 0%-2%
- Loan size: $1 Million to $100+ Million
Mezzanine debt fills the gap between senior loan and common equity. It is subordinate to a first mortgage, but takes priority over the property owner’s equity. Due to the higher risk to lenders, mezzanine loans charge higher interest rates than senior loans. The borrower (often the developer) uses a mezzanine loan is to limit equity dilution, maintain control of an asset, and capture more of its upside. For stabilized property owners, a mezzanine loan may provide a way to unlock value that has been created over a development or holding period.
- Purpose: Development, expansion, dividends, buyouts, refinancings, etc.
- Typical Collateral: Owner’s equity in the property
- Term: 1-5 years is common, but can be up to 20 years
- Amortization: None
- Grace period (interest only): Until Maturity
- Pricing: 10%-20% per annum
- Loan size: $1 Million to $100+ Million
Corporate Loan Purposes
Acquisitions
Dividends
Equipment
Growth Capital
Leveraged Buyouts
Office/Plant Expansion
Retail Inventory
Working Capital
Real Estate Loan Purposes
Acquisitions
Construction
Recapitalization
Refinance
Other
Financing Structures
Senior Secured & Unsecured
Junior Secured & Unsecured
Second Lien Loan
Mezzanine Financing
Senior Stretch
Asset Based
Unitranche
Lender Types
National Banks
Regional banks
Community Banks
Asset-Based Lenders
Mezzanine Lenders
SBICs
BDCs
Other non-bank lenders
Loan Marketplace Lender Types
The Funding Wizard® loan marketplace includes various lenders – from money center banks, through regional banks, community banks, mezzanine lenders, private debt lenders, and other lenders. Since each lender has different lending criteria, industry preferences, and return expectations, each borrower receives term sheets that are very different. The loan marketplace compares these term sheets and lets the borrower choose the best loan.
Lender NetworkGet competing term sheets in 21 days!
Learn how the Funding Wizard® and our financing experts can find you the best loan. Depending on your business situation, you could receive term sheets in 21 days.