Car Service Company

Car Service Company Buys Office and Expands Fleet with an Secured Line of Credit

Background

An entrepreneur runs a car service company in Long Island, New York. The company has a $100,000 line of credit from a bank.

The Need

The owner wanted to relocate the office and rapidly expand the fleet of high-end vehicles and limousines. Hoping to reduce parking expenses, the owner found a building in New York City with ample parking facilities for $1,000,000. The owner needed an additional $150,000 to expand the business.

Financing Solution

Biz2Credit reviewed the business and personal financials and recommended purchasing the new facility as a personal real estate investment. In doing so the owner would realize substantial gains over his previous parking and office arrangement in Long Island. Located near midtown Manhattan, the property included two family living spaces, mixed use office space, and parking for over 30 cars. The facility would generate rental income for the owner and reduce business expenses for parking and office space. The increased profitability strengthened the case for an additional line of credit. Biz2Credit structured a deal with the new lender to take a second lien on the newly purchased commercial facility.

Results

  • Received credit line approval within 48 hours of building closing
  • Received a conventional commercial mortgage at 85 percent LTV
  • Received a secured line of credit for $250,000
  • Benefits

    • Lower parking and office expenses by $12,000 a month
    • Additional working capital to expand fleet
    • Higher projected annual growth rate by about 50 to 60 percent
    • Better office space
    • Lower non-fare travel costs
    • No personal guarantee
    • Channel for future credit

    Biz2Credit structured a deal with the new lender to take a second lien on the newly purchased commercial facility.

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