A-8 Commercial Finance

Question 1

The purpose of this phone is to pay off when balloons on acquired by hand and provide money for subdivision improvements such as utilities and roads

Answer 1

Acquisition and development loans

Question 2

Short-term loans used by builders to finance construction cost of the project. This loan amount is advanced in periodic installments as work progresses and paid off in one balloon payment upon completion of the project.

Answer 2

Construction/interim loans

Question 3

This is something that contractors must often post which is Shores lenders the project will be completed according to the agreement

Answer 3

Performance bond

Question 4

When a project is completed, the city issues one of these?

Answer 4

Certificate of occupancy, confirming building codes have been met in the premises or fit for occupancy

Question 5

This type of loan is often used to pay off construction loans and “by time” until real estate projects can be sold or leased.

Answer 5

Bridge “gap” loans

Question 6

Loans used to pay off all previous loans particularly construction loans, in real estate projects.

Answer 6

Permanent “take out” loans

Question 7

This is the source of most government loans for commercial purposes, it offers a guarantee program

Answer 7

SBA – small business administration

Question 8

What is the SBA guarantee program?

Answer 8

Reduces lenders risk. SBA loan will be a maximum of 90% on the value of the property

Question 9

Does a caprate include debt service

Answer 9

No

Question 10

This represents the number of months or years necessary to achieve a return of investment

Answer 10

GRM or gross rent multiplier

Question 11

How is the cap rate calculated?

Answer 11

And no I divided by Sales price

Question 12

Dividing the NOI by the CAP Rate gives the?

Answer 12

Property value

Question 13

Contains the details and proprietary information on the transaction; also creates the lien on personal property

Answer 13

Security agreement or chattel mortgage

Question 14

Filed with the Secretary of State to perfect the personal property we

Answer 14

Financing statement – UCC1

Question 15

Commercial loan application process

Answer 15

A. The first step: the lender B. The second step: underwriting C. The loan committee D. Closing the loan

Question 16

This is financial projections, debt coverage ratio’s, loan to value ratios, maximum loan amount

Answer 16

Pro Forma statement

Question 17

This is an evaluate shin of lenders risk, FDIC

Answer 17

Underwriting

Question 18

This type of phone is by private lenders to investors such as farmers and speculators. The maximum amount that can be borrowed is 50%

Answer 18

Land loans