Lines of Credit with Ting Wong

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‘Lines of Credit’ was recorded on Wednesday, December 14th 2016 at the WPOA meeting.

 

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This is part of the Worcester Rental Real Estate Networking and Training series.

 

[Start 0:00:00]

Ting: So my name is Ting, and I have my peers here with me, Tom Walsh, who’s a manager at

JP, and Shervin Khakian, who’s the manager of Downtown Boston, and we’re here to tell

you about a commercial line of credit with Eastern. We are the number one SBA lenders,

so we do a lot of these commercial lines. I know that some of you have talked about a

line at 2 percent, but those are mostly home equities against your primary property.

Male Speaker 1: That’s correct.

Ting: Yes, it’s against primary property as opposed to a commercial line like your commercial

property or your LLCs, so that’s the difference. We’re going to go over today the type of

financing, how to go get it, and then the Q&A, so we’re going to make it nice and quick

so that we’re available if you have any questions.

We’re not going to go to that page. Next one.

At Eastern, we have many types of financing and we have what we call microlending for

the people that don’t qualify under normal bank financing. For the people that don’t

qualify for normal bank financing because of credit score or not enough time with your

LLC, we have companies that we work with called ACCION and SEED, and they are the

higher risk kind of financing for your business. Just so that we can help our customers,

we have partners so that we can get the money to you when you need it, okay? Those are

the two companies that we actually work with when we can’t do it conventionally.

Go ahead.

Then we also work with the SBA. We are the number one SBA lender in Massachusetts

and New England and we’re the seventh largest nationally, so the SBA is the Small

Business Administration, so they’re here to help all small business owners.

Some of the programs we have are up here that we deal with, with the SBA. We have

longer-term programs. If you were to buy a property, we can do SBA programs with that

with only 10 percent down, and then we have other programs and these are the people

that we deal with at the SBA.

Then our typical loan on the small business side is between $10,000 to $3 million;

anything over $100,000 usually is commercial related, buying property. We work with all

industries, high risk. I think some of the banks consider constructions and restaurants

high risk. We deal with those. We do lines. We do loans, commercial real estate, and then

we have a product where we can get you approved and the money in your account in a

couple of hours if you meet certain parameters, and so we have the simplified product

that doesn’t require any paperwork. It’s just credit based and your business base on how

much revenue you do and we can get you easy access to capital.

Okay, I think we’re done. Does anyone have any questions?

Rich: Well, I think you guys get an A plus for having a succinct to the point presentation.

Ting: Thanks to you, Rich.

Brian: Thank you for coming out and speaking with us tonight. I have a few questions. If you

don’t have – let’s say you have a property that’s 100 percent owned, I have all equity in

it. That’s an easy position for you to look at. What if I have equity spread over multiple

properties that it gets a little more complicated, how might you look at solving that issue?

Ting: So it depends on how much money you need, so the need is really the issue. If you need

less than $100,000, we don’t care how much of the property you still have outstanding.

We don’t care. It’s credit based, so it’s unsecured. We don’t do appraisals. We don’t put a

lien on your property. We don’t do any of that. It’s unsecured. Under $100,000

Shervin: How is it set up, the business? Is it set up as an LLC, LLP? I’m sorry. Is it set up as an

LLC, LLP? Okay, we look at the total revenue of the LLC or LLP, so we don’t care about

how much equity you got out or in because it’s is all unsecured.

Male Audience 1: What are the rates for those sort of loans?

Shervin: The rate for the loan, it runs from 6.99 percent to 9.99 percent but the line is different.

Male Audience 1: What about the line?

Shervin: Right. For the line, you have to look at is as credit. It’s based on your credit.

Male Audience1: What’s the lowest?

Shervin: Is it prime plus 1?

Ting: Yeah.

Shervin: Prime plus 1.

Rich: You’re talking about an unsecured line?

Shervin: Unsecured

Rich: So that’s totally different than like a line of credit you have on your house where they

report.

[0:05:00]

Shervin: That’s for co-making.

Rich: They do an appraisal and they record. It’s on the registry of deeds. This is totally different?

Shervin: This is – just look at it like a credit card. It’s unsecured, but the interest is for your

business. Basically it’s based on your business that you’re going to get.

Brian: Is it based off – Rudolf in the room you said it’s based on off – it’s not me. It’s that one.

It’s the total income of the company

Shervin: LLC.

Brian: The LLC. Now is that net profit or total income?

Shervin: Number 1, total income.

Rich: So gross?

Shervin: Gross.

Ting: Gross.

Brian: Okay, so being a crafty businessman and not wanting to pay a lot of taxes and making my

company look ugly to a lawyer who wants to sue me, would you still look at something

like that?

Ting: We don’t care about your taxes. We don’t care about how you file them. We don’t care

about any of that. It is credit based and how much revenue your LLC generates.

Shervin: We don’t look at the expense.

Brian: Let’s talk.

Shervin: We look at the top number [laughter]. We look at the top number not the bottom

number.

Ting: We know everybody does that, the expenses to make. We all know that. If you need more

than $100,000, then I will need tax returns and we all need to verify information and

make sure that the net –

Brian: I don’t need any, but I’d like to get

Ting: But under $100,000, you do it whatever is beneficial to you.

Brian: Set up now before.

Rich: Yeah, $100,000 is good. We could do some damage with $100,000, could we? It’s a good

start.

Ting: On a loan.

Shervin: The loan.

Ting: The line is whatever rate.

Rich: Okay, wait. Hold on one second. I’m going to give you the microphone, so you ask your

question and you can answer into the microphone.

Male Audience 2: The question is on the line of credit. Is the rate locked for a certain amount

time?

Ting: So whatever the rate is and it is credit based, so the better your credit score is, the better

your rate is.

Male Audience 2: Sure.

Ting: So it will be like prime plus 1 or prime plus 2 and it will just always move with prime. So

if the prime doesn’t move, your rate won’t move.

Male Audience 2: So it’s variable.

Ting: So it’s variable, yeah. Yes.

Shervin: It’s like your home equity that

Male Audience 2: Thank you.

Shervin: Most of the people they get.

Rich: I’m getting some very good questions. Anybody else has any questions in the middle or

the back? Usually you guys like for me to get more exercise than this.

Female Audience 1: Do you mind?

Rich: Brian cannot wait to get the business card. He’s doing it right now. In addition to that,

there are all kinds of because I told Ting that – well, I think landlords are cheap. Is that

true? Okay, as a group, yes. Thank you. Frugal, okay. They brought all kinds of free stuff

– pens for people to fill out, applications, and stuff, and there’s all kinds of stuff over

here.

Ting: Please help yourself so we don’t have to carry it back, please [laughter].

Rich: Yeah. Brian, there will still be some left. I promise you don't have to do everything right

now. We are going to bring up our next speaker in just a minute. I’m going to come back

and visit Sandra and around 8:05, 8:10, we’re going to break and we’re going to start

playing the jeopardy game. At that time, if you guys want to speak with our good people

from the bank, you can do so out in the hallway. Here you go.

Sandra: Two questions. This is not working.

Rich: Yeah.

Sandra: Hello? Two questions. What’s the timeframe to get an approval from your bank if

someone walked in to your bank tomorrow and wanted to pull out this $100,000 line of

credit? How long does it take for that to happen and what also happens if somebody

defaults and doesn’t pay?

Shervin: Somebody defaults and doesn’t pay?

Sandra: Yeah.

Shervin: You go to jail [laughter]. I’m kidding. I have no idea what’s going to happen. I cannot

tell you about that one.

Ting: So, you know when you default and we have loans, the banks set aside a small portion of

their revenue every year for defaults and it happens. So they just send you letters and they

just try to collect it, but at the end of the day it’s unsecured so it is like if you don’t pay

your credit card. As for the approval process, once we get your application in the system,

you get an instant approval and not only is it instant. If you were doing a loan, we can get

into your – you have to have an account in Eastern. We will get into your account in 2

hours you have. The whole $50,000 up to $100,000, we’ll get into your account in 2

hours.

[0:09:58]

Rich: All right, who’s ever been told something like that by somebody that didn’t turn out to be

exactly true, right? [laughter] Lots of times, right? I can tell you, Sandra’s question, how

long after you walk into a bank, I wouldn’t know because I never walked into the bank. I

met Ting through email and 2 days later, she came out to me. She came to where I was,

so I think I just signed you up to go to everybody’s house. Sorry about that, but yeah I

wasn’t able to make it there, so she came to me.

If you have any additional questions, that’s why there are three of them here, so that we

can all talk to them right after our next segment, so let’s hear it for Ting, and Shervin, and

Tom.

Ting: Thank you [applause]. Thanks, Rich.

Rich: Great.

[End 0:10:55]

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