$3,500,000 Refinance in Anaheim, CA
$3.5 Million Cash-Out Refinance Helps a Generational Family Business Navigate a Major Transition
Loan Amount: $3,500,000
Loan Term: 24 Months
LTV: Sub 40%
Lien Position: 1st Deed of Trust
When a third-generation family business needed capital to wind down California operations and expand into Mexico, a cash-out refinance on a premium Anaheim industrial property became the bridge between their past and their future.
The Business: Built Over Generations, Facing a Turning Point
This family-owned company has been operating for over three decades. Now in its third generation of leadership, the business has built a global footprint that includes existing facilities in China. The next step in their evolution: establishing operations in Mexico to reduce costs, improve logistics, and position the company for long-term viability.
But transitions of this scale require capital. And this family, like many business owners who have spent decades building real assets, found themselves rich in assets and short on cash flow.
California’s rising minimum wage had compressed margins to the point where profitable operations in the state were no longer sustainable. Winding down California operations while simultaneously funding a new international facility required liquidity the business did not have sitting in a bank account.
What they did have was a building.
The Collateral: A Free and Clear Industrial Asset in Anaheim
The borrowers owned a 54,462 square foot industrial flex building on 3 acres in Anaheim, California, completely free and clear. No existing mortgage. No liens. Just equity.
The location is AAA. Anaheim’s industrial corridor is one of the most liquid and sought-after industrial markets in Southern California, with strong demand, limited supply, and consistent institutional interest. This was not a speculative or secondary-market asset. This was a highly desirable property with real, verifiable value.
With no debt on the building, the borrowers had significant equity to work with. A cash-out refinance was the right tool.
Why Traditional Banks Could Not Help
The borrowers were not a credit risk in the traditional sense. They had substantial real estate assets, a long operating history, and a clear strategic plan. But conventional lenders focus heavily on cash flow metrics like DSCR (Debt Service Coverage Ratio) and debt yield requirements.
With minimum wage increases eroding profitability and the business actively transitioning away from California operations, the current income picture did not satisfy bank underwriting requirements. The borrowers were caught in a common but frustrating gap: strong assets, constrained cash flow, and a legitimate business purpose that banks simply could not accommodate.
This is where Rubicon Mortgage Fund, LLC operates.
The Solution: A $3.5 Million Cash-Out Refinance with a Staged Draw Structure
Rubicon Mortgage Fund, LLC structured and funded a $3.5 million cash-out refinance secured by a 1st Deed of Trust on the Anaheim industrial property. Given the purpose of the loan, a standard lump-sum disbursement was not the right fit. Instead, the loan was structured as a staged draw facility, allowing the borrowers to access capital in up to three draws as their transition milestones required.
This structure works similarly to a line of credit in practice. The borrower draws capital as needed, tied to specific phases of the business transition, rather than taking on the full debt load upfront. It is a smarter, more efficient use of leverage for a borrower executing a multi-phase relocation.
Deal Highlights:
- Loan Type: Cash-out refinance with staged draw structure (up to 3 draws)
- Lien Position: 1st Deed of Trust
- Loan Amount: $3,500,000
- LTV: Under 40%
- Term: Two-year IO fixed rate
- Collateral: Free and clear 54,462 SF industrial flex building on 3 acres, Anaheim, CA
- Borrower Profile: 3rd-generation family-owned business
- Purpose: Fund operational transition from California to Mexico
- Exit Strategy: Sale of the property
Asset-Rich, Cash-Flow Constrained: A Common Profile for Private Lending
The borrower profile here is one Rubicon sees regularly. Established business owners, often multi-generational, who have accumulated significant real estate assets over decades but whose current income statements do not tell the full story of their financial strength.
Minimum wage increases in California hit labor-intensive businesses particularly hard. For a manufacturer or distributor with a large workforce, even modest per-hour increases compound quickly across 110 employees. When margins erode and the decision is made to restructure the business geographically, cash flow during the transition period looks nothing like it will once the new operations are up and running.
Traditional lenders underwrite the moment. Private lenders underwrite the asset and the trajectory.
At Sub 40% LTV, Rubicon’s position was conservative and well-protected. The borrowers retained the vast majority of their equity, the exit strategy through a property sale was clearly viable given the market, and the staged draw structure ensured capital was deployed purposefully.
The Hard Money Advantage: Structuring Around Reality
One of the distinguishing factors in this transaction was the on-site property evaluation. After physically walking the Anaheim building, Rubicon Mortgage Fund, LLC was able to affirm the asset’s quality and structure a loan that reflected actual market value rather than a desktop appraisal or formulaic underwriting output.
Private lending allows for this kind of judgment. When a lender can look at the asset, understand the borrower’s story, and structure a product that actually fits the need, better outcomes follow for everyone involved.
The staged draw structure is a direct example of this. Rather than forcing the borrower into a one-size-fits-all product, Rubicon built a facility that matched the timing and purpose of the capital deployment. That is not something most institutional lenders are positioned to offer.
Frequently Asked Questions
What is a cash-out refinance on a commercial property? A cash-out refinance is a loan in which the borrower refinances an existing property, or in this case a free-and-clear property, and receives a portion of the equity as cash at closing. The property secures the new loan. For business owners who have built up significant equity in commercial real estate, a cash-out refinance is often the most efficient way to access working capital without selling the asset.
What is a staged draw loan and how does it work? A staged draw loan allows the borrower to access the approved loan amount in multiple disbursements, or draws, rather than receiving the full amount at closing. Each draw is typically tied to a milestone, a phase of construction, a relocation stage, or another measurable event. This structure reduces the borrower’s carrying costs early in the loan term and ensures capital is deployed in alignment with actual project needs.
Why would a business use a cash-out refinance instead of a traditional business loan? For borrowers who are asset-rich but cash-flow constrained, a cash-out refinance secured by real estate is often more accessible than an unsecured business loan or conventional line of credit. Real estate lenders underwrite primarily against the value of the collateral, not just the income statement. This makes cash-out refinance a practical solution for business owners whose current cash flow does not reflect their overall financial strength.
What does free and clear mean in real estate lending? Free and clear means the property has no existing mortgage or liens against it. The owner holds the asset with 100% equity. In a cash-out refinance scenario, a free-and-clear property gives the lender a clean first lien position and gives the borrower maximum flexibility in how much equity they can access.
Can a business use a cash-out refinance to fund a relocation? Yes. A cash-out refinance can be used for virtually any business purpose, including funding an operational relocation, covering transition costs, or bridging cash flow during a restructuring period. The loan is secured by the real estate asset, not the specific use of funds, which gives borrowers significant flexibility in how they deploy the capital.
Ready to Put Your Equity to Work?
If your business owns commercial real estate and needs capital that traditional lenders have not been able to provide, a cash-out refinance through Rubicon Mortgage Fund, LLC may be the right solution.
We specialize in asset-based lending for borrowers whose stories do not fit neatly into a bank’s underwriting model. Strong collateral, clear purpose, and a viable exit strategy are what we underwrite against.
This is not just a transaction. It is a tool for preserving what your family built.
Contact Rubicon Mortgage Fund, LLC to discuss your cash-out refinance options today.
Contact RMF today to discuss your cash-out refinance loan needs.
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