The historically low rate environment we find ourselves in has made for real opportunities where ‘owner-user’ commercial real estate lending is concerned. We’re currently working our way through an SBA loan (food service property) where the lender is offering 4.125%...
The economy slows down, so prices drop. Companies make less, so they lay people off. So the economy slows down some more and prices drop a bit further… Companies make even less, so they lay more people off. So the economy slows down….
SBA: Size Matters. More than once I’ve had brokers and borrowers ask: ‘Since SBA Lending is a governmentally sponsored product, don’t all (SBA) lenders offer essentially the same thing?’ In a word, no. Smaller lenders make SBA loans with the established intention to...
As I’ve written in recent posts, The Fed is pressuring banks to reduce risk and the most obvious evidence of this is the struggle in today’s environment to get above 65% leverage. (if that.) Lenders haven’t changed their ‘LTV’ guidelines particularly, rather, they are...
In the Great Real Estate Debacle of 2007-2008, many developers got caught (particularly in Florida, Arizona, etc.) between the rush to finish construction and a fading market. Often, only a minority of units were sold when default occurred and those lending...
When loan requests come in below $1 million (much less $750k) many of the better priced lenders drop out. While this definitely applies to ‘Multi Family,’ it is especially true of commercial properties. I recently had a daunting search for a $350k loan amount on a...
In residential lending a cardinal – almost unmentionable – sin is: ‘Redlining,’ or, refusing a loan based on the property’s location. Commercial lenders of course, have no such restraint and will very bluntly refuse to lend in smaller markets or immediately announce...
I’m consistently surprised when brokers and borrowers ask me ‘what maximum LTV’ a lender might go to – as though the answer would tell them how much in the way of loan proceeds they can expect. It won’t. Economic Underwriting takes precedence, which is to say:...