Paper and Paper Weights - Posted by John Behle
Posted by John Behle on January 19, 1999 at 14:55:16:
As a banker told me one time, “John, if a banker has an HP12C calculator on his desk - it’s a paper weight”
I know VERY few bankers in the country that know anything about paper. They do not even know how to analyse it as collateral and few have ever made a loan against a note.
Even when you do find one that is willing, the time period is prohibitive. You can’t afford for them to mess around and check out the note you are looking at purchasing as collateral. They take too long and are too restrictive.
Myself and others that have successfully used banks that I know of have usually arranged lines of credit that are unsecured or secured by another asset. If it isn’t a pre-approved line of credit, it isn’t much good. You need to access the funds within hours not weeks. That can only happen if it is already in place with no collateral or some existing collateral.
This can happen with an investor that has equity. See the post about a FREE $350K HOUSE. It has a equity rental scenario in their that will help illustrate the principle.