What kind of secured loan?

If I were to have 400k+ in the bank, and I wanted to use a big chunk of this to purchase an ALF…would it be better to transfer this amount into my LLC’s account, move this into CD’s and secure a loan for this amount? What LTV can I expect, and what kind of rate? I’m thinking if I can get a 6% CD rate, I can use the credit line as needed…while the full amount is gaining interest. What would be the best way to structure this kind of loan?

Anyone in the lending industry want to chime in?


The answer to one of your questions depends on the sourcing/seasoning requirements of the lender/loan program.

As an individual, this is what you could expect:

90 LTV
Loan amounts between 250K~8KK
Purchase/R&T Refi/Construction Build Out Allowed
FICOs in the 600s

As a LLC, this is what you can expect (to allow you to transfer money into your legal entity):

65 LTV (with an allowance for a subordinated 2nd up to 90 CLTV)
680 FICO
Loan amounts between 100K-800K
No seasoning/sourcing of funds needed to close
Owner carry back allowed

Hope this help…


Scott Miller

Are those both line of credits? What kind of interest rate would I be looking at?

I would like to have an open line of credit available for numerous investments…secured by money in the CD’s.

Why don’t you contact Scott offline and discuss the opportunities that he may have for you. Thanks.

I don’t necessarily need to contact Scott…I’m just looking for general market rates on any line of credit secured by something other than real estate.

It’s appears this thread has taken a turn from commercial financing to unsecured LOC/lending…

If you want a price reference, you will need to provide more information.

I think that MDHaas suggested you contact me directly because you may not want your personal info to be posted for all to see—I nor any other commercial lender could “responsibly” give you a pricing point of reference without knowing personal info about you and/or the merits of the property in question.


Scott Miller


Scott Miller

It would be a line of credit secured by CD’s…so it would be secured.

This is a form of asset based lending that I’m not familar with (I’m obviously involved in the secured by real estate variety), so I suggest you contact the bank that holds your CDs.

Here is what I speculate you might be up against:

  • CDs are often time capsule investments (you need to hold them to the maturity date to achieve full face value).
  • Some CDs don’t meet the guidelines on liquidity (those that have no early withdrawal clauses).

I’d be curious to hear the slant from the bank that holds these CDs—please share your findings so that I and others may learn from your experience.


Scott Miller

This type of secured lending is very popular with small banks. The local banks that I use have a few different programs available for secured lines of credit. You can borrow against a cd and get a rate of 2% above CD rate. It is a good way to borrow cheaply. Some banks will lend up to twice the amount of the CD based on credit, deposit accounts, banking relationships, and liquidity. Other things that banks will take as collatteral for lines of credit are inventory, equiptment, accounts receivable (70% of receivables that are 60 days or less), and in SOME cases fleet car titles. I use this type of lending on a very regular basis because I mostly work with builders. Lots of banks will offer 100% CTC, but when secured lending comes into play is when the builders break out from doing what I call the “house here, house there” stage. Where they build wherever they find a customer with a lot. Once they get to the point where they want to buy their own lots in a certain area we put money into a CD and this gives them the abilty to sign a take-down schedule with the confidence that will be able to close on the deals.

Thanks, Christopher, that’s exactly what I was looking for. I think this kind of loan would be perfect for real estate investing, as you would be basically be paying 2% only on the money borrowed (2% over CD rate), while the full amount in CD’s is still gaining interest. I will definately look into it more, and post my results.

Christopher, can you shoot me a PM with the banks you know that do this?


These are small local or regional banks here in the great state that I use. Most if not all of them are limited in the areas that they service. I would suggest finding a small local or regional bank in your area and sitting down with them. That is going to be your best bet. Another thing to remember. To these types of banks loyalty is very important. They all tend to know each other and they all talk. It is very similar to high school. In otherwards be careful about burning relationships over .125% on a CD or a line of credit just because someone offers you a better deal somewhere else. Trust goes a long way when you are talking about “good ole boy” lending! Hope this helps.