By Gregg S. Reichman - CEO/Founder - Active Finance Group
( Phoenix , April 30, 2008 ) -- As part of a long-term strategy to manage the phenomenal growth in business, Active Finance Group LLC (AFG) has announced a temporary suspension of hard money loans in all markets as part of the company’s expansion plans which include revamping its information services and website management as well as increasing staff to accommodate the growing demand for AFG services.
According to AFG Chief Executive Officer, Gregg Reichman, re-tooling the company is a critical business strategy to further position AFG as an industry leader in a volatile and changing industry.
“Private money financing for the Entrepreneurial Real Estate Investor has largely dried up throughout this country,” said Reichman. “Significant pools of capital have been raised to take advantage of deeply discounted large packages of assets being offered for sale, but those funds are not made available to the independent investors who represent the core Borrower at AFG,” he said.
Reichman explained that Private Money Lender's who are still operating have been inundated with non-performing loans from Borrowers who are not honoring their commitments, and recovering assets that have been subject to significant price deflation. All of these events have caused many of AFG's competitors to close their doors, stop lending completely, or offer loans on a very sporadic, unpredictable basis.
AFG is one of only a very few Private Money Lenders in the USA to have the benefit of an Institutional Credit Facility. This provides a competitive advantage to AFG Borrowers who can rely upon AFG for speed, convenience and capacity without having to ask "do you have the money today" because the company's capital structure provides for very significant Lending capacity. This advantage, in addition to "speed and convenience" is what AFG "sells" and it is the foundation and platform upon which we have built our business.
The questions and answers below are provided to communicate the details of what is happening:
Why did AFG temporarily stop lending? Demand for AFG's loan products is at an all time high. Our underwriting and loan processing staff have become stretched to manage the demand. While we never guarantee a specific funding timeframe our typical turn around time on loan funding was always advertised as 4-7 business days. As demand increased and efficiency decreased, the timeframe became elongated, well past what our range of what we feel is acceptable, and what is required to keep our Borrowers satisfied.
We thought demand would level out and we could "catch up" so to speak, but that has not been the case, in fact the opposite scenario has been occurring, and demand continued to increase creating a potential scenario that could jeopardize our trademark for customer service and quick turn around.
Q. Is AFG going out of business?
A. No we are not. AFG is a solvent company with substantial liquidity and surplus availability of funds. Our internal infrastructure needs re-tooling in order to get back to a processing and response time that works, most importantly for our Borrowers, and our Staff.
Q. Has AFG lost its Credit Facility?
A. No, we have not. We have a long standing relationship with one of the most notable and respected Investment Bankers in the world and we have enhanced the relationship more so in recent months then every before. This was never in question, except by rumors which, unfortunately will follow any event of this nature, however those rumors are completely unfounded.
Q. When will AFG resume lending?
A. Our current target to resume lending is 60 days or, approximately July 1, 2008.
Q. What changes will be made when Lending resumes?
A. The web based application process will be relatively unchanged, we will be asking Borrowers to provide more detail about their specific needs so that our Staff needs to spend less time doing research. We are restructuring the way loans applications "flow" through the company, adding staff and adding significant automation to replace certain human tasks. Underwriting policies and procedures will remain substantially unchanged. Loan Pricing and loan terms will remain unchanged.
If you have any specific questions about the information listed above, please call your area AFG Representative or our National Sales Manager, Joe Macdonald 832-588-4927 . You can also call me directly at 602-443-6141 if you have any questions.
Thank you for being an AFG Borrower. We appreciate your business, patience during this expansion and loyalty. We are working to build AFG to continue serving your needs well into the future.
Gregg S. Reichman
Founder / CEO
Active Finance Group, LLC
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