| Whether you're in the business or are a property | | | | lending was down 60% as of May 2009 compared to |
| owner, trying to a get a commercial mortgage loan | | | | the previous year. Ironically, this is when we all thought |
| closed in this market, is akin to having a hyena as a | | | | they would really kick in and save small business. |
| house pet. You can do it, but it will be painful. | | | | Commercial Mortgage Loans |
| Here's what is going on, from a commercial mortgage | | | | Without suddenly sounding optimistic one of the best |
| brokers perspective. Conventional lending is all but | | | | things you can do for yourself is to work with the |
| dead. If your property isn't less than 60% loan to value, | | | | RIGHT bank and or lender. You need to only work |
| you're going to have a difficult time getting it closed. If | | | | with the 20% that are still actively lending. Conversely |
| you have a typical investment property (non multifamily | | | | and especially if you are facing a balloon the worst |
| like office or a warehouse), with a non national credit | | | | thing you can do is tie up you loan request with a bank |
| tenant(s), you had better have enough outside income | | | | that is not aggressively lending. Most of these |
| to carry the loan on its own or you are going to have | | | | commercial mortgage loans end up in the decline |
| a tough go at it (though not impossible). | | | | category wasting months of time and thousands of |
| Literally 80% of the banks either don't want to lend or | | | | dollars, at a minimum, for the borrower. |
| they can't lend as their banking ratios have fallen below | | | | For those that qualify for the government programs |
| the feds standards. And or they just don't have the | | | | such as the SBA commercial loans, this can be a |
| cash... Many banks including some major national one | | | | blessing. 85% - 90% financing is a life saver as |
| have gone out of business, as its been well publicized. | | | | property values continue to decline. In addition, the |
| So you have to work with what the remaining 20%. | | | | secondary market for these types of programs are |
| Often times the offered terms are harsh and | | | | the healthiest in the business and continue to improve. |
| expensive. For those of you that are in the business | | | | Our fearless leader, Obama, has step up the |
| you know that the conduit and or CMBS market is | | | | guarantee to banks as well as bought $15 billion of |
| completely broken and nonexistent. It was literally | | | | SBA 7a loans that had clogged the system in early |
| down 98% in 2008 versus 2007. 98%... That's | | | | 2008. |
| according the respected Mortgage Bankers | | | | By the way, the main qualifying component to the SBA |
| Association. | | | | loans is that your business occupies at least 51% of |
| The SBA and other more mysterious (and | | | | the buildings space. Contrary to their reputation, the |
| unpredictable government programs) have tried to | | | | SBA program have some of the easiest qualify |
| step up and fill the void. In some regards its working in | | | | standards out there, compared to other commercial |
| others it has been disappointing. For example SBA | | | | mortgage loans. |