Are Banks Really Doing Commercial Mortgages
90% of Bank Lenders are not doing Main Street loans, although they won't (can't) admit it.
Big Banks lend to big businesses.
Regional and local Banks typically lend to mid sized and small business.
But things have changed. The credit crunch happened.
The Big Banks got bailed out and the smaller banks have been hung out to dry.
When the credit crunch happened the smaller Banks were caught with tons of construction loans that went bad, Fannie and Freddie Mae stock that went to zero and then a requirement to pay FDIC insurance premiums three years in advance to cover the FDIC insurance bump up to $250,000.
Needless to say, the smaller Bank reserves took a major hit resulting in resulting in no money to lend and a desperate need to rebuild their capital base.
Now the "green shoots" have withered and stimulus has faded, the smaller Banks are facing increased defaults on commercial loans and they have gone into "extend and pretend" mode where they do not foreclose and go out of business. They are extending the under preforming loans in "hopes" that the economy will get better and they will not have to recognize the loses hidden in their balance sheets.
Banks exist on customer's and borrower's deposits.
With so many bad and non preforming loans on their books, the chances are those borrowers are no longer depositors. Therefore smaller Banks need deposits big time and will do everything in their power to attract new deposits - including taking new commercial loan requests that they cannot possible grant!
Most of my clientele have experienced initial Bank approvals for commercial loans only to be ultimately turned down 2 to 4 months later by the "Loan Committee".
The typical scenario is that the Bank will just ask for more and more information and stonewall your request until you get frustrated and go away or they come up with some inane excuse to deny your loan.
Now you can see why when I say 90% of the Bank aren't lending, I am not blowing smoke!
As a matter of fact, 100% of my loan requests that have closed this year were denied by at least one Bank, if not more.
Now you may ask, why are we closing loans when others are turning them down --- and that is a fair question.
The answer is two fold.
We have been so successful in the last 6 years, we now use our own money at very competitive rates to fund certain loan requests.
When a loan request doesn't meet our internal sweet spot, we broker those requests to our book of commercial lenders who chose not to participate in the "debt hysteria" that brought on the credit crunch.
Too boot, many of our Lenders only write new loans through us, --- which makes us "virtually direct lenders" across the board.
The bottom line is that if your have a commercial loan request that makes good business sense, and you have decent credit, your the numbers work for what you are trying to accomplish, your business trends have held up and your history and experience in business is good we can probably get you an "Intent to Lend" (Term Sheet) within a week and to the closing table in 60 days.
We don't blow smoke, and we will work like our tails off to get your loan closed.
Arthur
860-946-6637
Big Banks lend to big businesses.
Regional and local Banks typically lend to mid sized and small business.
But things have changed. The credit crunch happened.
The Big Banks got bailed out and the smaller banks have been hung out to dry.
When the credit crunch happened the smaller Banks were caught with tons of construction loans that went bad, Fannie and Freddie Mae stock that went to zero and then a requirement to pay FDIC insurance premiums three years in advance to cover the FDIC insurance bump up to $250,000.
Needless to say, the smaller Bank reserves took a major hit resulting in resulting in no money to lend and a desperate need to rebuild their capital base.
Now the "green shoots" have withered and stimulus has faded, the smaller Banks are facing increased defaults on commercial loans and they have gone into "extend and pretend" mode where they do not foreclose and go out of business. They are extending the under preforming loans in "hopes" that the economy will get better and they will not have to recognize the loses hidden in their balance sheets.
Banks exist on customer's and borrower's deposits.
With so many bad and non preforming loans on their books, the chances are those borrowers are no longer depositors. Therefore smaller Banks need deposits big time and will do everything in their power to attract new deposits - including taking new commercial loan requests that they cannot possible grant!
Most of my clientele have experienced initial Bank approvals for commercial loans only to be ultimately turned down 2 to 4 months later by the "Loan Committee".
The typical scenario is that the Bank will just ask for more and more information and stonewall your request until you get frustrated and go away or they come up with some inane excuse to deny your loan.
Now you can see why when I say 90% of the Bank aren't lending, I am not blowing smoke!
As a matter of fact, 100% of my loan requests that have closed this year were denied by at least one Bank, if not more.
Now you may ask, why are we closing loans when others are turning them down --- and that is a fair question.
The answer is two fold.
We have been so successful in the last 6 years, we now use our own money at very competitive rates to fund certain loan requests.
When a loan request doesn't meet our internal sweet spot, we broker those requests to our book of commercial lenders who chose not to participate in the "debt hysteria" that brought on the credit crunch.
Too boot, many of our Lenders only write new loans through us, --- which makes us "virtually direct lenders" across the board.
The bottom line is that if your have a commercial loan request that makes good business sense, and you have decent credit, your the numbers work for what you are trying to accomplish, your business trends have held up and your history and experience in business is good we can probably get you an "Intent to Lend" (Term Sheet) within a week and to the closing table in 60 days.
We don't blow smoke, and we will work like our tails off to get your loan closed.
Arthur
860-946-6637
