Hi Guys, I'm new here. Can you cash-out refi a business like real estate?

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January 11, 2021

by a searcher from University of North Texas in Dallas, TX, USA

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from University of Pennsylvania in Chicago, IL, USA
Absolutely - often subordinated debt is used for transactions like this but hinges upon size of the enterprise. That type of debt can be used regardless of hard asset value. Hard assets with equity value can always be turned into cash via senior type debt. Just like real estate, the lender will require a margin of safety - i.e. if equity value is X then the loan will be some percentage of X.
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from Indiana University South Bend in Granger, IN, USA
You could certainly try. I'd imagine what you would be trying to do is to lever up the business and then distribute the cash. Depending on the lender's risk tolerance and the business's balance sheet I suppose anything is possible, although I would guess it would be more difficult than in RE.
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