Commercial Lending - The Market Is Improving
We are now over six-months into the Covid-19 pandemic, and a lot has changed. We have all seen our work, educational, sports and personal lives upheaved, and although some things are starting to return back to normal, it still feels that we are quite far away from having things completely normalized. We have moved away from a full shutdown and panic, to being able to start getting back to work and start to do some of the things we all enjoy. But it does appear in some ways we will be forever impacted by Covid-19.
When it comes to Commercial Lending, the commercial loan marketplace has seen its own upheaval this year as well. What began as a very strong start with both Bank and non-bank lenders aggressively looking for new credits, turned into a bit of a nightmare as all lenders took a step backwards and tightened up underwriting guidelines with some lenders shutting down completely. In addition, the PPP program provided as part of the CARES Act caused a huge distraction in the bank and credit union worlds, and even in some private lending marketplaces, as for over two-months in the middle of the year lenders focused on nothing but PPP loans for their customers. All of these changes to the lending marketplace made it challenging for commercial loan borrowers to find the financing that they needed this year.
Where do things sit today?
SBA Remains In The Spot-Light
We want to continue to promote how important SBA lending is at this juncture. The two main SBA loan programs, the SBA 504 and SBA 7A loan programs, put lenders in the position where most of the risk related to a transaction is taken off the table for them. By doing this it encourages lenders to take on loan requests that might have higher risk levels, and to do so while requiring less in the form of down payment and cash flow from the Borrowers. If you have never thought about SBA financing before, now might be a great time to do so. There are some huge benefits that both programs offer. There are too many to cover at once, but we have put together some nice marketing pieces that cover what is available, such as SBA 7A Loans Explained.
However, below are some highlights of the benefits you could receive from both programs. These programs are available for business purchases, 51% or more owner-occupied real estate purchases or refinances, equipment financing needs, business expansion or start-ups, FF&E, or to refinance existing business or 51% or more owner-occupied real estate debt.
Brad Hettich has had the privilege of being a returning contributor to the Real Estate Revealed Radio Show airing on AM560 Chicago every Sunday morning at 8:00 AM. The show covers a wide range of real estate related topics, and Brad serves as the Commercial Lending Expert. He provides all sorts of facts related to Commercial Financing and you can hear past podcasts at https://www.realestaterevealed.com/archive/ or check out Brad’s latest appearance from Sunday, September 20th Here.
Hard Money / Bridge Lending
There are still many hard money / bridge lending options available for clients in need. Whether if using an asset based non-bank lender for your account receivable financing or getting a real estate bridge loan to buy time to repair, re-tenant, or sell an investment property, there are many lenders and options available. Please let us know if you want to explore a non-bank financing option for your business or real estate holdings.
Become a CLX Referral Partner
Do you have customers in need of commercial financing and you do not know how to help them? Here at CLX we offer several programs in which you can become a referral partner and earn commissions on opportunities you run across. You can be involved as little as providing us with a name and phone number. Or if you prefer, you can help manage the client through the entire lending process. We have many training tools and marketing materials available to help you grow your own client base. Please contact us directly at info@commerciallendingx.com if you are interested in learning more about referring business to CLX.
Recent Success Stories
$2,152,500 Business Acquisition: The Client was seeking to acquire an existing business, along with the real estate it operated from, to own / manage. We were able to secure SBA 7A financing to facilitate the business and real estate acquisition at an extremely attractive 25-year fixed rate of 3.95%, along with fund initial working capital for the Client.
$2,000,000 Business Acquisition: The Client was seeking to acquire an existing food service business in a challenging Covid environment, along with fund the build out of a new location and purchase of new equipment. We were able to secure SBA 7A financing to facilitate the business acquisition, leasehold improvements, equipment acquisition, and initial working capital, despite some impact to the business from Covid-19.
$500,000 Refinance Mixed-Use Building: The Client was seeking to refinance their partially owner-occupied mixed-use building. We were able to secure financing with a traditional lender to facilitate the refinance at a low fixed rate of 3.625% with a traditional bank.
