Lets say you wanted to borrow $1 million dollars +-. You had no debt. And assets in excess of the amount you wished to barrow for collateral. But are not ready to liquidate at the present time. You would pay off the debt in 5-7 years. Would need to amortize the loan at 30 years to manage the payments.

Are there any other options other than going to a convention bank loan or I guess a private equity firm of some sort maybe?

Thanks guys

Go see Fat Paulie down at 5th and Main. Just make sure you pay it back on time, or his cousin Vinnie might show up with his baseball bat to "have a word with you".

In all seriousness, unless this is for a solidly grounded business venture and you can find some investor backing, or you have an absolute ton of equity in real estate and can qualify for $1M+ worth of home equity loans/lines of credit or cash out refinances, a personal collateral loan from a bank is likely going to be your only option. But even there you're not going to find one with a 30 year amortization term, with 5-10 being more realistic. (Plus your definition of $1M+ collateral may be very different from what the bank will accept as $1M+ collateral.)

Or do you happen to have $1M+ in something like a 401k? If so, you can sometimes get loans from that.

If I wasn't able to secure a loan at my bank, I would probably just get whacked.

Any legitimate lender will want to see far more in collateral than the face amount of the loan so as to account for their risk (default, inflation, etc.) Your collateral better be in assets that generate income or appreciation greater than the premium demanded by the lender. S&Ls are, generally, less greedy than conventional banks, but I suspect you'd get your best rates with a mortgage where the collateral is assumed to be protected from many forms of potential loss.

But the bottom line is, why pay interest on $1,000,000 that you already have in hand? Unless the $1E6 is in something that is going to be worth far more in 30 years than it is now, you're best off doing something with it in the meantime. A 30 year loan at 6% will cost about $1,160,000 in interest whereas if you invest $1,000,000 at 4% APR you will earn over $2,000,000 in interest over 30 years (compounded monthly).

A bank is going to require much more than $1 mil for collateral particularly since it sounds like you don’t already have a very good relationship with one. In reality you would be lucky to get a 60% loan to value (LTV). You will also need to show you have an income to cover the loan plus all your normal expenses.

Pulling money out of your retirement investments will come with a strong penalty unless you only need it for a very short period of time (I think it’s less than either 30 or 90 days).

There are wealthy individuals who loan sums like you’re interested in the private market but they are very cautious and target about 20-25% return on their investments. That means you would end up paying double what you initially borrowed. Is your investment going to be able to do that and still make you money?

There are plenty of legitimate "hard Money Lenders"

It would depend on what you are doing with the money and your collateral.

The last I checked going rate is 10% to 18% depending on the risk and length of the loan with 5% to 7% upfront points.

Some are structured interest only others are amortized with a balloon payment at the end of the term.

The usual term is 12 to 36 months but many do longer terms

Most will want 65% or better LTV collateral coverage so to borrow a million you would need around 1,600,000 to 2,000,000 collateral.

Rates and points can change daily until you have a commitment letter.

This is typically done for bridge loans and construction financing.

The terms listed are just for an example, not an offer.

This is usually done for a specific business purpose.

Thanks guys, I appreciate the info.

Sig2392, I guess that was what I was asking, so thank you.

PLEASE tell me you are planning on building a bowling alley in my locale. Or a Zaxby's.

I had a buddy several years ago that was an independent mortgage loan broker.

On the side, he also worked with various individual lenders and borrowers. He would arrange the loans, and make a percentage.

I remember he had quite a few doctors and lawyers who would need short term loans, oftimes in a hurry. You might want to inquire locally.

quote:

Originally posted by ridgerat:
I had a buddy several years ago that was an independent mortgage loan broker.

On the side, he also worked with various individual lenders and borrowers. He would arrange the loans, and make a percentage.

I remember he had quite a few doctors and lawyers who would need short term loans, oftimes in a hurry. You might want to inquire locally.

Yes, thanks. Something along those lines is what I was curious about.

Prospectus, aren't they going to require a prospectus ?

They are finding a business.