I want to be the first to wish you all a very Happy, Healthy & Prosperous New Years.
I wish everyone a very joyous Holiday Season, and I will return on the 7th of January, with a fresh new look to the blog. The blog will be moving to our own website at Loanforbiz.com, we will continue to post for the next 30 days at both locations, but as of February 1, the blog will be on our site.
I am very excited about this change. The new name is the Daily Commercial Loan Blog.
To those loyal readers of the 150 posts that I wrote this year I say thank you for your attention each and every day as I share my personal viewpoints. You might not agree with everything that I wrote but I know you found it entertaining at the least and hopefully educational at the most.
Remember to subscribe to the 10 FREE Special Reports.
Harlan
Thursday, December 18, 2008
Wednesday, December 17, 2008
Daily Observation - Pleading Ignorance
I hope the title grabbed you, Why would a professional, experienced broker plead ignorance when it comes to pricing a deal. The reason is very simple WE HAVE NO IDEA OF WHAT CAN AND CANNOT BE FUNDED TODAY!
Now I know you think that I have gone off the deep end when I make such a categorical statement, but the truth is we don't. And anyone who tells you they do, unless its their own money don't believe. Now am I saying that the use of a broker is now worthtless because you, Harlan cannot get deals close. NO I'm not saying that at all.
What I am saying is that when talking to your clients share this information with them so their expectations are realistic. Let me give you a perfect example.
We had a call with a potential client that received a "LOI" from a bank, and they wanted me to explain it to them. Granted this was not our LOI, actually it wasn't anyone LOI it was a financing spreadsheet which the "client" treated as an LOI. Well after reviewing this great "LOI", I called the bank that issued it a week before. Guess What?
None of the programs that they were so aggressive about were offered by the bank anymore. The 20 Year fixed which this Bank was well known for is now a 5 and 10 year balloon.
Another example we were talking with another potential client today and they were telling us that they had been negotiating with a bank on a piece of commercial real estate, the bank led them to believe they were VERY interested in the deal, strung them along for about four months, then you guessed it they had no interest in the deal anymore.
So hopefully these two examples will tell you why I consistently tell my clients I have no idea if I can get the deal done today for you or not. BUT, and here's the important but: if I believe in the deal I am going to do everything within my control to fund the deal.
For more on getting deals closed, sign up for your 10 FREE Special Reports on Getting Your Loan Closed! Also visit our website at loanforbiz.com for even more information on loans and financing methods available in these turbulent times.
Now I know you think that I have gone off the deep end when I make such a categorical statement, but the truth is we don't. And anyone who tells you they do, unless its their own money don't believe. Now am I saying that the use of a broker is now worthtless because you, Harlan cannot get deals close. NO I'm not saying that at all.
What I am saying is that when talking to your clients share this information with them so their expectations are realistic. Let me give you a perfect example.
We had a call with a potential client that received a "LOI" from a bank, and they wanted me to explain it to them. Granted this was not our LOI, actually it wasn't anyone LOI it was a financing spreadsheet which the "client" treated as an LOI. Well after reviewing this great "LOI", I called the bank that issued it a week before. Guess What?
None of the programs that they were so aggressive about were offered by the bank anymore. The 20 Year fixed which this Bank was well known for is now a 5 and 10 year balloon.
Another example we were talking with another potential client today and they were telling us that they had been negotiating with a bank on a piece of commercial real estate, the bank led them to believe they were VERY interested in the deal, strung them along for about four months, then you guessed it they had no interest in the deal anymore.
So hopefully these two examples will tell you why I consistently tell my clients I have no idea if I can get the deal done today for you or not. BUT, and here's the important but: if I believe in the deal I am going to do everything within my control to fund the deal.
For more on getting deals closed, sign up for your 10 FREE Special Reports on Getting Your Loan Closed! Also visit our website at loanforbiz.com for even more information on loans and financing methods available in these turbulent times.
Tuesday, December 16, 2008
Daily Observation - Negotiation Tactics
As nothing is happening in the world of SBA Finance, and the FED bored us today with a rate cut almost to zero, I thought I would borrow some advice on real estate negotiation from George Ross, Trump's Attorney and head real estate attorney for the Trump Organization. George Ross wrote a fabulous book named Trump Strategies for Real Estate: Billionaire Lessons for the Small Investor.
Whether you like "The Donald" or not, these words are truly words of wisdom.
Whether you’re involved in real estate or another entrepreneurial endeavor, you’re always working towards a major objectives. Sure, things don’t always run as smoothly as we would want them to, and sometimes you’make concessions (or “sweeten the deal”) in order to make it work.
But what do you do when you find that you compromised so much that your big picture objectives are no longer in sight? The ultimate goal of any deal is to feel satisfied and better off than before you started working on it. But what do you do if you don’t see that realistic possibility anymore?
Don’t waste your time – it’s more valuable than money. If you don’t see the benefits of the deal anymore, have the willpower to walk away from it.
So how do you know when to walk away? Here are some questions to ask yourself when you notice things change drastically:
Does the deal still make sense to you? Before you even start a new deal or venture, figure out what you want to achieve. This will help you stay focused throughout the process, so when things take a turn for the worst be able to acknowledge the reality of the situation and act accordingly. You’ll be a lot better off admitting a once strong deal has become weak it is better to walk away than see it all the way through.
Do your alternatives look a lot more attractive? To do business from a position of strength, you have to have the ability to look at various potential deals or paths you can take. If you keep the old saying “there are plenty of fish in the sea” in mind, then you’ll ensure that you won’t kill yourself trying to catch one of those fish.
Has the atmosphere changed from cooperative to hostile? People engage in business with people they trust and have a rapport with. Do your best to distinguish between the deal-makers you trust and the deal breakers that drive you crazy.
If your answer is yes to all of the above, then it might time be to stop making concessions and start pursuing another venture. After all, you don’t want to sweeten a deal to the point that it gives you a financial cavity.
I hope you enjoyed tonight's slight deviation. Remember for your next commercial investment visit us at loanforbiz.com, the home of Lightning Commercial Funding. Also don't forget to sign up for your 10 FREE Reports to GET Your Next Loan Closed.
Whether you like "The Donald" or not, these words are truly words of wisdom.
Whether you’re involved in real estate or another entrepreneurial endeavor, you’re always working towards a major objectives. Sure, things don’t always run as smoothly as we would want them to, and sometimes you’make concessions (or “sweeten the deal”) in order to make it work.
But what do you do when you find that you compromised so much that your big picture objectives are no longer in sight? The ultimate goal of any deal is to feel satisfied and better off than before you started working on it. But what do you do if you don’t see that realistic possibility anymore?
Don’t waste your time – it’s more valuable than money. If you don’t see the benefits of the deal anymore, have the willpower to walk away from it.
So how do you know when to walk away? Here are some questions to ask yourself when you notice things change drastically:
Does the deal still make sense to you? Before you even start a new deal or venture, figure out what you want to achieve. This will help you stay focused throughout the process, so when things take a turn for the worst be able to acknowledge the reality of the situation and act accordingly. You’ll be a lot better off admitting a once strong deal has become weak it is better to walk away than see it all the way through.
Do your alternatives look a lot more attractive? To do business from a position of strength, you have to have the ability to look at various potential deals or paths you can take. If you keep the old saying “there are plenty of fish in the sea” in mind, then you’ll ensure that you won’t kill yourself trying to catch one of those fish.
Has the atmosphere changed from cooperative to hostile? People engage in business with people they trust and have a rapport with. Do your best to distinguish between the deal-makers you trust and the deal breakers that drive you crazy.
If your answer is yes to all of the above, then it might time be to stop making concessions and start pursuing another venture. After all, you don’t want to sweeten a deal to the point that it gives you a financial cavity.
I hope you enjoyed tonight's slight deviation. Remember for your next commercial investment visit us at loanforbiz.com, the home of Lightning Commercial Funding. Also don't forget to sign up for your 10 FREE Reports to GET Your Next Loan Closed.
Monday, December 15, 2008
Daily Observations - Financing Franchises
Tonight I want to address the area of franchise financing. There are certain lenders that all they do are franchise financing, and we work very closely with them. But here's the rub; according to business brokers we work with as well as Franchisors, franchises are just not selling in this economy.
The reason they may not be moving is two fold; one the financing aspect is getting more difficult. Second the borrowers do not have the money to qualify to purchase the franchises as a lot of them have been purchased with cash or money from other investments. To quote one friend of mine he has not sold a franchise in over six months because of the two above reasons.
So why would I spend a blog post on the financing of them. The reason is that they are still do-able under the right circumstances. Below are those circumstances.
Franchise Financing
• Loans selectively available from $250,000 to $5,000,000 throughout the U.S.
• Acquisition of existing franchise businesses are available with additional collateral requirements, unless the franchise is heavily equipment based.
• Start-up requests must be fully secured or show substantial outside income sufficient to cover debt service
• Up to $300,000 with minimum real estate collateral (must have 10 yr. remaining lease plus option)
• Up to $4,000,000 with real estate
• Start-ups must be fully secured by real estate
• Financing may be available for start-up, expansion, refinancing &/or acquisition
Borrower Profile
• Direct (and recent) management experience within the industry is required as follows: A minimum of 5 years GM or ownership experience required for restaurants A minimum of 3 years management or ownership required for all other industries Experience must be recent
• Guaranty required of: operating company (if real estate holding company is used), relevant affiliates, all individuals with 20% or more ownership and other individuals with less than 20% ownership considered key~ with respect to management experience or financial strength
• Borrowers/owners must have clean/acceptable personal credit histories
Please visit loanforbiz.com the website for Lightning Commercial Funding for more on franchising and other financing methods. Also please sign up for your 10 FREE Special Reports to help you get your next commercial or business loan closed.
The reason they may not be moving is two fold; one the financing aspect is getting more difficult. Second the borrowers do not have the money to qualify to purchase the franchises as a lot of them have been purchased with cash or money from other investments. To quote one friend of mine he has not sold a franchise in over six months because of the two above reasons.
So why would I spend a blog post on the financing of them. The reason is that they are still do-able under the right circumstances. Below are those circumstances.
Franchise Financing
• Loans selectively available from $250,000 to $5,000,000 throughout the U.S.
• Acquisition of existing franchise businesses are available with additional collateral requirements, unless the franchise is heavily equipment based.
• Start-up requests must be fully secured or show substantial outside income sufficient to cover debt service
• Up to $300,000 with minimum real estate collateral (must have 10 yr. remaining lease plus option)
• Up to $4,000,000 with real estate
• Start-ups must be fully secured by real estate
• Financing may be available for start-up, expansion, refinancing &/or acquisition
Borrower Profile
• Direct (and recent) management experience within the industry is required as follows: A minimum of 5 years GM or ownership experience required for restaurants A minimum of 3 years management or ownership required for all other industries Experience must be recent
• Guaranty required of: operating company (if real estate holding company is used), relevant affiliates, all individuals with 20% or more ownership and other individuals with less than 20% ownership considered key~ with respect to management experience or financial strength
• Borrowers/owners must have clean/acceptable personal credit histories
Please visit loanforbiz.com the website for Lightning Commercial Funding for more on franchising and other financing methods. Also please sign up for your 10 FREE Special Reports to help you get your next commercial or business loan closed.
Sunday, December 14, 2008
Daily Observation - Small Business Defined
As we continue to wait for the new SBA rules and regulations to be enacted. As we also wait to see what if any of the economic stimulus plan will be adopted. As we wait to find out how the economic stimulus plan will affect future SBA funding and as we wait to see if the Secondary Market will return I wanted to address what qualifies as a Small Business under the SBA guideline.
SBA defines a small business as one that is independently owned and operated and not dominant in its field. A small business must also meet the employment or sales standards developed by the Small Business Administration and based on the North American Industry Classification System (NAICS).
In general, the following criteria are used by SBA to determine if a concern qualifies as a small business and is eligible for SBA loan assistance:
• Wholesale - not more than 100 employees;
• Retail or Service - Average (3 year) annual sales or receipts of not more than $6.0 million to $29.0 million, depending on business type;
• Manufacturing - Generally not more than 500 employees, but in some cases up to 1,500 employees;
• Construction - Average (3 year) annual sales or receipts of not more than $12.0 million to $28.5 million, depending on the specific business type.
Even though the SBA-qualifying standards are more flexible than other types of loans, lenders will generally ask for certain information before deciding to use an SBA loan program. Visit our website loanforbiz to see what additional documentation is needed and to see if your business qualifies as an SBA Eligible business. Remember Non-Profits do not qualify for any SBA Financing.
Remember to get your FREE 10 Special Reports on Getting Your Loan Closed.
SBA defines a small business as one that is independently owned and operated and not dominant in its field. A small business must also meet the employment or sales standards developed by the Small Business Administration and based on the North American Industry Classification System (NAICS).
In general, the following criteria are used by SBA to determine if a concern qualifies as a small business and is eligible for SBA loan assistance:
• Wholesale - not more than 100 employees;
• Retail or Service - Average (3 year) annual sales or receipts of not more than $6.0 million to $29.0 million, depending on business type;
• Manufacturing - Generally not more than 500 employees, but in some cases up to 1,500 employees;
• Construction - Average (3 year) annual sales or receipts of not more than $12.0 million to $28.5 million, depending on the specific business type.
Even though the SBA-qualifying standards are more flexible than other types of loans, lenders will generally ask for certain information before deciding to use an SBA loan program. Visit our website loanforbiz to see what additional documentation is needed and to see if your business qualifies as an SBA Eligible business. Remember Non-Profits do not qualify for any SBA Financing.
Remember to get your FREE 10 Special Reports on Getting Your Loan Closed.
Thursday, December 11, 2008
Daily Observation - SBA Guarantee Fee
This fee is the exact same everywhere you go in the United States. It is a fee that is set by the Small Business Administration for assisting in the funding of a Business Opportunity 7A or a real estate 504 loan.
I chose that word assisting instead of funding because the SBA does not fund loans, the bank funds the loan, the SBA guarantees a portion of the loan for the benefit of the funding bank. That portion is knows as the SBA guarantee amount of the loan, which is 75% of the loan amount. For example your client buys a business and gets a loan for$750,000. 75% of $750,000 will be what the guarantee fee is computed on or$562,500.00.
The guarantee fee will be 3% of $562,500 or $16.875.00, based on the information below.
FEES ASSOCIATED WITH SBA LOANS
To offset the costs of the SBA's loan programs to the taxpayer, the Agency charges lenders a guaranty fee and a servicing fee for each loan approved and disbursed. The amount of the fees are based on the guaranty portion of the loans. The lender may charge the upfront guaranty fee to the borrower after the lender has paid the fee to SBA and has made the first disbursement of the loan.
The lender's annual service fee to SBA cannot be charged to the borrower. For loans approved on or after December 8, 2004, the following fee structure applies:
For loans of $150,000 or less, a 2 percent guaranty fee will be charged. Lenders are again permitted to retain 25 percent of the up-front guarantee fee on loans with a gross amount of $150,000 or less. For loans more than $150,000 but up to and including $700,000, a 3 percent guaranty fee will be charged.
There is a high probability that due to the economic situation we find ourselves in that the SBA Guarantee Fee may be removed completely for two years. This is one of the proposals currently being considered, but for now these fees remain in place.
Sign up for your 10 FREE Special Reports to GET Your Next Commercial & Business Loan Closed. Visit Lightning Commercial Funding to hear an excerpt of a radio interview that we just completed on qualifying for commercial and business loans.
I chose that word assisting instead of funding because the SBA does not fund loans, the bank funds the loan, the SBA guarantees a portion of the loan for the benefit of the funding bank. That portion is knows as the SBA guarantee amount of the loan, which is 75% of the loan amount. For example your client buys a business and gets a loan for$750,000. 75% of $750,000 will be what the guarantee fee is computed on or$562,500.00.
The guarantee fee will be 3% of $562,500 or $16.875.00, based on the information below.
FEES ASSOCIATED WITH SBA LOANS
To offset the costs of the SBA's loan programs to the taxpayer, the Agency charges lenders a guaranty fee and a servicing fee for each loan approved and disbursed. The amount of the fees are based on the guaranty portion of the loans. The lender may charge the upfront guaranty fee to the borrower after the lender has paid the fee to SBA and has made the first disbursement of the loan.
The lender's annual service fee to SBA cannot be charged to the borrower. For loans approved on or after December 8, 2004, the following fee structure applies:
For loans of $150,000 or less, a 2 percent guaranty fee will be charged. Lenders are again permitted to retain 25 percent of the up-front guarantee fee on loans with a gross amount of $150,000 or less. For loans more than $150,000 but up to and including $700,000, a 3 percent guaranty fee will be charged.
There is a high probability that due to the economic situation we find ourselves in that the SBA Guarantee Fee may be removed completely for two years. This is one of the proposals currently being considered, but for now these fees remain in place.
Sign up for your 10 FREE Special Reports to GET Your Next Commercial & Business Loan Closed. Visit Lightning Commercial Funding to hear an excerpt of a radio interview that we just completed on qualifying for commercial and business loans.
Wednesday, December 10, 2008
Daily Observation - A New Financing Alternative
Tonight I am writing about an area that I have little knowledge about, other than to know that this loan program exists. I have received the information about the USDA loan program B&I and wanted to share it with you. In the proper locations, rural area with a population less than 50,000 people this is a very viable alternative to SBA Financing.
So below is an an email that I got from an SBA Lender back east that specializes in B&I loans. I know this is an area that I am going to be researching over the holidays and plan to incorporate it into our loan programs that we offer.
The main program that businesses are able to utilize is the Business and Industry Program through the USDA. There are no restrictions except for location; it has to be in a town that has a population less than 50,000. Underwriting is similar to doing an SBA 7(a) loan. Unlike going through the SBA, the bank is able to offer fixed rate options. Amortizations are longer through the USDA (30 years real estate/15 years equipment) which generally is able to provide more cash flow to the borrower. The guarantee fee is 2% of the guaranteed portions. Guarantee %’s are 80% up to $5.0M, 70% up to $10.0M, and 60% up to $20.0M.
Eligible properties and use of funding are start up, expansion, business acquisition, commercial real estate, working capital, equipment inventory and soft costs. A crucial difference between the two programs is that the B&I can be used for non-profits which is strictly forbidden with a traditional SBA Loan. In addition there is no business size restriction, and loan amounts up to $20,000,000.
Sign up for your 10 FREE Special Reports on Getting Your Next Commercial Loan Closed. Visit loanforbiz.com the home site for Lightning Commercial Funding.
So below is an an email that I got from an SBA Lender back east that specializes in B&I loans. I know this is an area that I am going to be researching over the holidays and plan to incorporate it into our loan programs that we offer.
The main program that businesses are able to utilize is the Business and Industry Program through the USDA. There are no restrictions except for location; it has to be in a town that has a population less than 50,000. Underwriting is similar to doing an SBA 7(a) loan. Unlike going through the SBA, the bank is able to offer fixed rate options. Amortizations are longer through the USDA (30 years real estate/15 years equipment) which generally is able to provide more cash flow to the borrower. The guarantee fee is 2% of the guaranteed portions. Guarantee %’s are 80% up to $5.0M, 70% up to $10.0M, and 60% up to $20.0M.
Eligible properties and use of funding are start up, expansion, business acquisition, commercial real estate, working capital, equipment inventory and soft costs. A crucial difference between the two programs is that the B&I can be used for non-profits which is strictly forbidden with a traditional SBA Loan. In addition there is no business size restriction, and loan amounts up to $20,000,000.
Sign up for your 10 FREE Special Reports on Getting Your Next Commercial Loan Closed. Visit loanforbiz.com the home site for Lightning Commercial Funding.
Tuesday, December 9, 2008
Daily Observation - Debt Refinancing Cont.
Tonight we continue with our theme of debt refinancing. Last night we talked about SBA Business Loans and debt refinancing now we shift our focus to commercial real estate loans.
Commercial Real Estate Loans or Investment Property Loans offer a greater chance to refinance them providing you meet certain qualifications and time frames. Both the qualifications and the time frames have changed drastically within the last six months as everything else within commercial finance has.
Before we could re-appraise a property and if there was equity we would be able to refinance any existing debt as well as give our client additional capital providing there was sufficient equity in the property. Loan to Value ratios bordered on 75% to 85%. Lenders were not concerned about the use of the cash out an as long as you were current on the loan, had good credit and the property appraised at more than what you originally purchased it for the deal was done rather easily.
NO MORE
Now most lenders will not even consider a debt refinance if you have not owned the property for at least two years or longer. Next even if you owned the property for two years or more they want to know exactly what you paid for the property and then they calculate what increase in value they believe is really there not necessarily what the appraiser says is there.
Next they look at the net operating income of the property and add at least another 15% to 20% to the bottom line expenses. then they examine your tenants and how long they have been a tenant as well as when their lease expires and the length of the tenancy.
Now the most important point! If they believe that you are using the money from the cash out for other than improving the property (increasing the value to the lender) they are not in favor of doing these loans at all. Paying yourself back for expenses associated with the property is Ok, but using the money for paying debt is not longer looked upon favorably.
Visit loanforbiz to sign up for your 10 FREE Report on getting your next loan closed.
Commercial Real Estate Loans or Investment Property Loans offer a greater chance to refinance them providing you meet certain qualifications and time frames. Both the qualifications and the time frames have changed drastically within the last six months as everything else within commercial finance has.
Before we could re-appraise a property and if there was equity we would be able to refinance any existing debt as well as give our client additional capital providing there was sufficient equity in the property. Loan to Value ratios bordered on 75% to 85%. Lenders were not concerned about the use of the cash out an as long as you were current on the loan, had good credit and the property appraised at more than what you originally purchased it for the deal was done rather easily.
NO MORE
Now most lenders will not even consider a debt refinance if you have not owned the property for at least two years or longer. Next even if you owned the property for two years or more they want to know exactly what you paid for the property and then they calculate what increase in value they believe is really there not necessarily what the appraiser says is there.
Next they look at the net operating income of the property and add at least another 15% to 20% to the bottom line expenses. then they examine your tenants and how long they have been a tenant as well as when their lease expires and the length of the tenancy.
Now the most important point! If they believe that you are using the money from the cash out for other than improving the property (increasing the value to the lender) they are not in favor of doing these loans at all. Paying yourself back for expenses associated with the property is Ok, but using the money for paying debt is not longer looked upon favorably.
Visit loanforbiz to sign up for your 10 FREE Report on getting your next loan closed.
Monday, December 8, 2008
Daily Observation - Debt Refinance
So can we get cash out of our properties to pay off debt? Seems like this is the most popular question we get every day. And of course I will have to answer to the client it depends? So rather than just leave you with that answer I will attempt to shed some light on the question.
Before we can answer it though we have to decide if we are going through an SBA program or are we talking about a straight commercial investment.
To get money back for a loan that is going to be approved by the SBA all debt will have to be 100% business related. In addition to be 100% business related it will all have to be documented, as well as traced from where it was borrowed from to what it was used to pay for.
For example if the money was used for salaries rather than equipment it may be much harder to get the money back through a refinance. The SBA lenders want to see that the money was actually used in the business for purchasing tenant improvements, equipment, inventory anything that can be turned back into future company profits. Working capital loans that are not being used for true expansion are getting much harder to get approved.
So before you ask for a debt refinance as part of working capital for a small business loan make sure you can properly document the need as well as the past expense. The other requirement for debt refinance for SBA loans is that the SBA can only take out a loan that is more expensive then the new SBA loan proposed. Not only must their be a substantial savings between the two loans, the terms of the SBA loan also must be better. Its getting harder and harder to establish the refinance of an existing loan with an new SBA loans.
In my opinion its better to refinance a non-SBA loan with cash or cash equivalent and then apply for an in increase or a new SBA loan that has nothing to do with a debt refinance but a request for expansion capital etc. The request will most likely be approved if its for a growing company with strong financials, this most likely will not work for a start up operation.
Make sure you sign up for the FREE 10 Reports on Commercial and Business loans, or visit loanforbiz.com for more details.
Tomorrow night we examine debt refinance for a commercial investment.
Before we can answer it though we have to decide if we are going through an SBA program or are we talking about a straight commercial investment.
To get money back for a loan that is going to be approved by the SBA all debt will have to be 100% business related. In addition to be 100% business related it will all have to be documented, as well as traced from where it was borrowed from to what it was used to pay for.
For example if the money was used for salaries rather than equipment it may be much harder to get the money back through a refinance. The SBA lenders want to see that the money was actually used in the business for purchasing tenant improvements, equipment, inventory anything that can be turned back into future company profits. Working capital loans that are not being used for true expansion are getting much harder to get approved.
So before you ask for a debt refinance as part of working capital for a small business loan make sure you can properly document the need as well as the past expense. The other requirement for debt refinance for SBA loans is that the SBA can only take out a loan that is more expensive then the new SBA loan proposed. Not only must their be a substantial savings between the two loans, the terms of the SBA loan also must be better. Its getting harder and harder to establish the refinance of an existing loan with an new SBA loans.
In my opinion its better to refinance a non-SBA loan with cash or cash equivalent and then apply for an in increase or a new SBA loan that has nothing to do with a debt refinance but a request for expansion capital etc. The request will most likely be approved if its for a growing company with strong financials, this most likely will not work for a start up operation.
Make sure you sign up for the FREE 10 Reports on Commercial and Business loans, or visit loanforbiz.com for more details.
Tomorrow night we examine debt refinance for a commercial investment.
Thursday, December 4, 2008
Daily Observations - 1031's
Tonight we are going to look at 1031 exchanges. A 1031 exchange is a tax move to avoid the capital gains from selling a property as long as you meet certain requirements by acquiring a property of like kind. The purpose of this blog is not to educate you on the entire 1031 exchange process, which I recommend that you hire a lawyer or a CPA for.
What I want to talk about is the mistake of identifying properties before you have found out that a lender is willing and most importantly in today's economic environment able to fund the transaction. Today not all properties that have been identified are financeable. Even though a property may be at a high CAP Rate and cash flowing like a cash cow should doesn't mean that lender today is going to finance that particular property for that particular borrower.
The problem is that once you "legally" identify a property its identified. AND you can only legally identify three properties. If you are not able to fund any of the three identified that client loses the ability to take advantage of the 1031 exchange, as its now closed to you.
So to avoid losing the 1031 exchange pre-qualify the properties ahead of time before they are legally identified.
For more on getting your loan closed download our free reports at getyourloanclosed.com.
What I want to talk about is the mistake of identifying properties before you have found out that a lender is willing and most importantly in today's economic environment able to fund the transaction. Today not all properties that have been identified are financeable. Even though a property may be at a high CAP Rate and cash flowing like a cash cow should doesn't mean that lender today is going to finance that particular property for that particular borrower.
The problem is that once you "legally" identify a property its identified. AND you can only legally identify three properties. If you are not able to fund any of the three identified that client loses the ability to take advantage of the 1031 exchange, as its now closed to you.
So to avoid losing the 1031 exchange pre-qualify the properties ahead of time before they are legally identified.
For more on getting your loan closed download our free reports at getyourloanclosed.com.
Wednesday, December 3, 2008
Daily Observations - Still Another Reason
Tonight we are back to our SBA discussions. After reading a piece today in the paper there may be another reason why the amount of SBA Loans is decreasing. We actually saw an example of this today with a closing that we just had., but more about this in a minute.
Reason Number Six if you are counting, the SBA Guarantee Fee.
Before I can explain why this is an issue I will first explain what it is. Every loan that a bank issues that is SBA approved is guaranteed by the SBA. The price of that guarantee by the SBA is the Guarantee Fee. The way the SBA Guarantee Fee works is as follows. The SBA charges a certain percent of the loan amount borrowed reduced by 25%, For example a $300,000 loan guarantee fee is based on a $225,000 amount. and that amount is multiplied by a percentage point varying between 2 .0 to 3.0 percent depending on the size of the loan guaranteed.
What this guarantee does is to protect the lender in the event of a default by the borrower. So here's the issue. What I found out today is that if the bank does not dot all their (I')s and cross all their (T)'s perfectly, the SBA guarantee will not pay. Therefore the bank would not be able to recapture their loss.
Its no wonder the lenders are concerned about doing SBA Loans. If you knew that you had no guarantee that the SBA would pay in the event of a default would you do new loans? So back to today's' experience.
We had a closing today that the lender told us the docs would be ready two days ago. It took them over two full days to review the docs after the loan was fully approved and the docs were drawn. It's almost like they were afraid to release the docs. So please advise all your clients that the doc signing dates will be later than what is expected. The reason for this is the bank is reviewing the loan docs, then re-reviewing the docs and then finally having a final review of the docs before they are released.
Now we will see how fast they fund as they have to review the docs again now that the client has signed them all. Stay tuned as we undoubtedly will find reason number seven why the SBA Lenders may not be coming back.
Make sure you sign up for the 10 FREE Special Reports based on my new book GET Your Loan Closed!
Reason Number Six if you are counting, the SBA Guarantee Fee.
Before I can explain why this is an issue I will first explain what it is. Every loan that a bank issues that is SBA approved is guaranteed by the SBA. The price of that guarantee by the SBA is the Guarantee Fee. The way the SBA Guarantee Fee works is as follows. The SBA charges a certain percent of the loan amount borrowed reduced by 25%, For example a $300,000 loan guarantee fee is based on a $225,000 amount. and that amount is multiplied by a percentage point varying between 2 .0 to 3.0 percent depending on the size of the loan guaranteed.
What this guarantee does is to protect the lender in the event of a default by the borrower. So here's the issue. What I found out today is that if the bank does not dot all their (I')s and cross all their (T)'s perfectly, the SBA guarantee will not pay. Therefore the bank would not be able to recapture their loss.
Its no wonder the lenders are concerned about doing SBA Loans. If you knew that you had no guarantee that the SBA would pay in the event of a default would you do new loans? So back to today's' experience.
We had a closing today that the lender told us the docs would be ready two days ago. It took them over two full days to review the docs after the loan was fully approved and the docs were drawn. It's almost like they were afraid to release the docs. So please advise all your clients that the doc signing dates will be later than what is expected. The reason for this is the bank is reviewing the loan docs, then re-reviewing the docs and then finally having a final review of the docs before they are released.
Now we will see how fast they fund as they have to review the docs again now that the client has signed them all. Stay tuned as we undoubtedly will find reason number seven why the SBA Lenders may not be coming back.
Make sure you sign up for the 10 FREE Special Reports based on my new book GET Your Loan Closed!
Tuesday, December 2, 2008
Daily Observations - Words of Wisdom
Tonight we leave SBA behind and talk in general about commercial loans. I found this piece that was sent to me about two years ago and I have updated the ratios and the numbers to meet today's exciting environment. The concepts still work, so take heed. These are Commercial Loan Words of Wisdom, which are becoming part of my next piece. "The mistakes that borrowers make" which I will be sharing in January with our clients and centers of influence.
But tonight make sure that you sign up to receive our 10 FREE Special Reports to GET Your Loan Closed!, or visit loanforbiz.com for much more on commercial loans. Now the words of wisdom:
No such thing as 100% financing
If you have scores below 600, expect much higher rates if a lender can even be found for your project.
If you want a construction loan, you will need at least 30-40% of total project cost. If you don’t have that kind of equity you’re looking at too expensive of a project. High leverage construction loans are only available if you have high net worth and are an experienced developer. PS this was changed from 20 to 25% when the article was first written.
Small loan amounts are often the toughest to work and have the most problems. Don’t waste your time on loans under $200,000
Apartment loans normally take 45 - 60 days from time of signed LOI (letter of interest). If you get a call that requests under 45 days, it’s possible but difficult. I have seen loans close in less time, but the appraisals cost extra, and everybody has to get documents in on time. If one link in the chain breaks, 30 days will come quickly.
Lenders order the appraisal. The typical turnaround is 3-4 weeks.
Always look at purchase contracts ASAP. If they’re short, you will want to have the buyer request an extension and make sure everybody is on the same page. Deals blow up because sellers will not extend contracts, and buyers assume they will.
Commercial loans generally take 45-60 days.
When talking about LTV, just because guidelines say 75%, doesn’t mean the borrower will get 75%. Every deal is based on the cash flows (net income) of the property. I can lend up to 70% or 75% on most types of property, but many times (used to be sometimes), cash flows support much less. Before you quote LTV’s or max loan amount, show us the figures.
But tonight make sure that you sign up to receive our 10 FREE Special Reports to GET Your Loan Closed!, or visit loanforbiz.com for much more on commercial loans. Now the words of wisdom:
No such thing as 100% financing
If you have scores below 600, expect much higher rates if a lender can even be found for your project.
If you want a construction loan, you will need at least 30-40% of total project cost. If you don’t have that kind of equity you’re looking at too expensive of a project. High leverage construction loans are only available if you have high net worth and are an experienced developer. PS this was changed from 20 to 25% when the article was first written.
Small loan amounts are often the toughest to work and have the most problems. Don’t waste your time on loans under $200,000
Apartment loans normally take 45 - 60 days from time of signed LOI (letter of interest). If you get a call that requests under 45 days, it’s possible but difficult. I have seen loans close in less time, but the appraisals cost extra, and everybody has to get documents in on time. If one link in the chain breaks, 30 days will come quickly.
Lenders order the appraisal. The typical turnaround is 3-4 weeks.
Always look at purchase contracts ASAP. If they’re short, you will want to have the buyer request an extension and make sure everybody is on the same page. Deals blow up because sellers will not extend contracts, and buyers assume they will.
Commercial loans generally take 45-60 days.
When talking about LTV, just because guidelines say 75%, doesn’t mean the borrower will get 75%. Every deal is based on the cash flows (net income) of the property. I can lend up to 70% or 75% on most types of property, but many times (used to be sometimes), cash flows support much less. Before you quote LTV’s or max loan amount, show us the figures.
Monday, December 1, 2008
Daily Observation - It May Not Work
Tonight we are back to SBA related blogs. I have been talking to many of the local California lenders that I work with and the consensus is that the plan to move to LIBOR, thus guaranteeing that the secondary market was to follow is DEFINITELY in question this evening.
The thought was that by moving away from a prime based product to a more aggressive LIBOR based product the secondary lenders would come flying back to make a market and thus free up capital for the small business borrower. Nothing today is further than the truth according to the contacts that I have.
I am going to quote a piece from The Los Angeles Times that will perfectly echo my thoughts, then I will come back with what I believe is one of the issue behind the issue. So first the quoted material.
Loans guaranteed by the Small Business Administration have dropped sharply in the last year. Small-business operators have seen other cash sources dry up, including home-equity loans, conventional business loans and even credit cards.
One expert didn't dispute the need to unlock the secondary market for such loans but said it was unclear how, and whether, that would work.
"There is not enough detail on the program yet to really know how much impact it's going to have and whether it will result in freeing up more capital," said the chief executive of CDC Small Business Finance Corp.located in San Diego. His company makes SBA real estate loans and sells them on the secondary market.
That market has suffered as investors find higher interest rates in other markets.
The above are the more obvious reasons why the lenders might not becoming back so quickly. But I heard today that the infrastructure for the loan programs to shift from a quarterly billing cycle to a monthly adjustment cycle is extremely expensive and very complicated to make the transition to. Until this transition is made no lender is going to offer the LIBOR based product. In addition to the infrastructure the pricing is too close to Prime now and there is no real benefit for a secondary market to buy the loans because they would have no where to sell the paper after they acquired it.
For more on the SBA programs visit loanforbiz.com and request our 10 FREE Special Reports on getting your commercial and business loan closed.
The thought was that by moving away from a prime based product to a more aggressive LIBOR based product the secondary lenders would come flying back to make a market and thus free up capital for the small business borrower. Nothing today is further than the truth according to the contacts that I have.
I am going to quote a piece from The Los Angeles Times that will perfectly echo my thoughts, then I will come back with what I believe is one of the issue behind the issue. So first the quoted material.
Loans guaranteed by the Small Business Administration have dropped sharply in the last year. Small-business operators have seen other cash sources dry up, including home-equity loans, conventional business loans and even credit cards.
One expert didn't dispute the need to unlock the secondary market for such loans but said it was unclear how, and whether, that would work.
"There is not enough detail on the program yet to really know how much impact it's going to have and whether it will result in freeing up more capital," said the chief executive of CDC Small Business Finance Corp.located in San Diego. His company makes SBA real estate loans and sells them on the secondary market.
That market has suffered as investors find higher interest rates in other markets.
The above are the more obvious reasons why the lenders might not becoming back so quickly. But I heard today that the infrastructure for the loan programs to shift from a quarterly billing cycle to a monthly adjustment cycle is extremely expensive and very complicated to make the transition to. Until this transition is made no lender is going to offer the LIBOR based product. In addition to the infrastructure the pricing is too close to Prime now and there is no real benefit for a secondary market to buy the loans because they would have no where to sell the paper after they acquired it.
For more on the SBA programs visit loanforbiz.com and request our 10 FREE Special Reports on getting your commercial and business loan closed.
Tuesday, November 25, 2008
Daily Observation - CASH Flow
Tonight I want to re-examine the word Cash flow. By the way I deliberately capitalized cash flow. Because without cash flow there is no project, simple that's just the way it is today. Where before we could cross-collateralize or pledge additional assets, not any more. No cash no deal. Also what you consider cash flow the lender will definitely reduce that total amount by all their ancillary fees and deductions.
I am going to share with you information from Special Report #5 Understand How Cash Flow is the Number One Determinant if your Loan will be Approved. Get this FREE Report as well as the other nine at loanforbiz.com or getyourloanclosed.com.
What is cash flow?
Cash flow is defined differently depending on what you are acquiring. For example if you are buying a business the cash flow is more aptly called Sellers Discretionary Earnings (money which is left at the end of the month for the seller after all debt service and other expenditures are covered). Actually, business brokers use SDE to determine the selling price of a business, but more about that latter.
If you are purchasing a piece of real estate, then cash flow is that money which is left over after you deduct all your debt service and operating expenses for the property. Once that net amount is determined the lender will allow you a certain percentage of the available cash flow for the new loan. The total dollars that you are lent is ascertained by the calculation known as debt service coverage ratio.
Debt service Coverage ratio is the new loan’s expected annual debt service divided by the current yearly net cash flow. Today more than ever lenders want to know if you have more cash available then is projected to meet your debt obligation.
Another point to ask yourself is…
WHY WOULD YOU BUY A PROPERTY THAT IS NOT CASH FLOWING?
We are currently working with a client that is purchasing a piece of property knowing today that it is currently a poor investment, but they have information a major thoroughfare will be built through the town, so they are betting on the future value of the property even though today the economics don’t make sense.
So how is cash flow really calculated from the lenders point of view? The lender will calculate cash flow very differently than the prospective borrower. I cannot tell you how many times I have a client demonstrate to me that the project is cash flowing at a 1:1.25 ratio, and the lender comes back with their calculations at 1:105, or even less.
Why such a discrepancy? Who is Right?
The reason for the discrepancy is the lender will add in all expenditures and apply them to the bottom line. The key term in the last sentence is all. All means expenses that don’t appear today on the seller’s cash flow analysis, income and expense statement or even in tax returns.
How can these expenses be applied when they do not appear anywhere?
Again the reason is lenders always look at the worst-case scenario, which is, they have to take the property back due to foreclosure. If the lender has to take the property back they will have marketing, leasing and management expenses to run the property. Most borrowers will reduce or totally eliminate these costs. The buyer’s rational is they are going to do the leasing, and marketing of the property. Borrowers also assert they can perform these duties for a lot less than the cost of a professional manager or management company.
I’m not telling you this to scare you, but to prepare you.
As I mentioned previously Cash Flow is King, We want to make sure that you are accounting for all expenditures. By the way any extraordinary expenses such as a new roof or one time only equipment purchases are not deducted against cash flow as they are one-time non-recurring expenses.
I am going to share with you information from Special Report #5 Understand How Cash Flow is the Number One Determinant if your Loan will be Approved. Get this FREE Report as well as the other nine at loanforbiz.com or getyourloanclosed.com.
What is cash flow?
Cash flow is defined differently depending on what you are acquiring. For example if you are buying a business the cash flow is more aptly called Sellers Discretionary Earnings (money which is left at the end of the month for the seller after all debt service and other expenditures are covered). Actually, business brokers use SDE to determine the selling price of a business, but more about that latter.
If you are purchasing a piece of real estate, then cash flow is that money which is left over after you deduct all your debt service and operating expenses for the property. Once that net amount is determined the lender will allow you a certain percentage of the available cash flow for the new loan. The total dollars that you are lent is ascertained by the calculation known as debt service coverage ratio.
Debt service Coverage ratio is the new loan’s expected annual debt service divided by the current yearly net cash flow. Today more than ever lenders want to know if you have more cash available then is projected to meet your debt obligation.
Another point to ask yourself is…
WHY WOULD YOU BUY A PROPERTY THAT IS NOT CASH FLOWING?
We are currently working with a client that is purchasing a piece of property knowing today that it is currently a poor investment, but they have information a major thoroughfare will be built through the town, so they are betting on the future value of the property even though today the economics don’t make sense.
So how is cash flow really calculated from the lenders point of view? The lender will calculate cash flow very differently than the prospective borrower. I cannot tell you how many times I have a client demonstrate to me that the project is cash flowing at a 1:1.25 ratio, and the lender comes back with their calculations at 1:105, or even less.
Why such a discrepancy? Who is Right?
The reason for the discrepancy is the lender will add in all expenditures and apply them to the bottom line. The key term in the last sentence is all. All means expenses that don’t appear today on the seller’s cash flow analysis, income and expense statement or even in tax returns.
How can these expenses be applied when they do not appear anywhere?
Again the reason is lenders always look at the worst-case scenario, which is, they have to take the property back due to foreclosure. If the lender has to take the property back they will have marketing, leasing and management expenses to run the property. Most borrowers will reduce or totally eliminate these costs. The buyer’s rational is they are going to do the leasing, and marketing of the property. Borrowers also assert they can perform these duties for a lot less than the cost of a professional manager or management company.
I’m not telling you this to scare you, but to prepare you.
As I mentioned previously Cash Flow is King, We want to make sure that you are accounting for all expenditures. By the way any extraordinary expenses such as a new roof or one time only equipment purchases are not deducted against cash flow as they are one-time non-recurring expenses.
Monday, November 24, 2008
Daily Observations - We Need to Share
Tonight's blog is a bit different than usual. Every night I share a new idea or thought about what is happening in Commercial Finance or Business financing. But tonight I don't have anything new to share. BUT I do have a very important point I want to make.
WE MUST SHARE, I have posted 137 new items. But here's the rub nobody is passing the information onto the ultimate person that needs the information. Also the initiator of the new programs is not getting the word out either. For example the SBA has not shared with the average person that the SBA 7A, the mainstay of SBA Loans has changed drastically.
I can hear you saying to yourself, why should they share the info to the public at large, your statement is not really meaningful because there would be no need for the public to know, unless of course they are borrowing money. And yes, I would agree with that premise, so lets narrow the scope of people that need to know. How about the real estate industry as a whole. Do you think it would be beneficial for them to know?
I would. So I spent the last five days calling commercial Realtors asking them if they knew about all the relevant changes to financing and real estate transactions that the SBA is enacting. Guess what they did not know either.
So I narrowed the scope even further and started to call business brokers and asked them the same question, and guess what they had no idea either.
So what I would like to recommend is that if you read something that no one else has shared with you, please tell your friends etc. Only by getting the word out to our potential clients, or centers of influence can we be of service to people in general. And TODAY we all need to help each other.
For 10 FREE Special Reports to help you close more loans visit loanforbiz.com.
WE MUST SHARE, I have posted 137 new items. But here's the rub nobody is passing the information onto the ultimate person that needs the information. Also the initiator of the new programs is not getting the word out either. For example the SBA has not shared with the average person that the SBA 7A, the mainstay of SBA Loans has changed drastically.
I can hear you saying to yourself, why should they share the info to the public at large, your statement is not really meaningful because there would be no need for the public to know, unless of course they are borrowing money. And yes, I would agree with that premise, so lets narrow the scope of people that need to know. How about the real estate industry as a whole. Do you think it would be beneficial for them to know?
I would. So I spent the last five days calling commercial Realtors asking them if they knew about all the relevant changes to financing and real estate transactions that the SBA is enacting. Guess what they did not know either.
So I narrowed the scope even further and started to call business brokers and asked them the same question, and guess what they had no idea either.
So what I would like to recommend is that if you read something that no one else has shared with you, please tell your friends etc. Only by getting the word out to our potential clients, or centers of influence can we be of service to people in general. And TODAY we all need to help each other.
For 10 FREE Special Reports to help you close more loans visit loanforbiz.com.
Sunday, November 23, 2008
Daily Observation - Your Credit
Tonight since it is Sunday when I 'm writing this blog there are no new SBA Updates so I thought I would change the topic and editorialize for a bit. We need to take some action to help prevent what is occurring to every one's credit.
I don't believe the issue that I am going to share with you is an isolated one, and maybe just maybe we can get some political press to help support our claims.
The average person today is facing this situation and we need to act to get it halted. As the value of peoples property which the lenders have takes as loan collateral have been reduced substantially over the last year, their overall credit is being affected drastically because the lenders have limited their amount of exposure to borrowers running up more and more debt. I applaud that situation because the lenders are looking out for themselves which they always do, and so they say they are protecting you and I from going further into debt. A noble response, if I have ever heard one.
But here's the problem. If you are aware and understand the credit scoring models you will immediately see the self-fulfilling prophecy the lenders are creating. They are stating that more and more borrowers are having credit issues so the lenders are freezing credit. Their rationale for freezing credit is that the reporting agencies are lowering credit scores due to the economic situation. However by the lenders lowering your available credit, the ratio to used credit to available credit increases significantly, and that increase causes the credit bureaus to lower your credit score even more.
For example lets say you have a $100,000 line of credit and you have borrowed $25,000,which is a 25% ratio of credit borrowed to available credit. Now the lender arbitrarily reduced your line of credit because your home value statistically may have fallen. So lets say they reduce your line of credit to $50,000, you are now at a 50% ratio, without you doing anything. That original 25% ratio is now at 50% which is going to lower your credit score. Now if the lender freezes your credit at $25,000 you are at 100%; which will significantly lower your credit score.
We need to let the lenders freeze your account if it is waranted but not alter the amount of available credit so that credit scores are not being affected. If the lenders want to protect themselves let them block further usage of credit till collateral values return but don't reduce available credit on paper. The credit score models would not be effected, and the lenders would be protected. A win - win scenario!
For more on the 5C's of credit opt in to receive our 10 FREE Special reports or visit loanforbiz.com for more information on credit scoring models.
Thursday, November 20, 2008
Daily Observation - It's OK to Pay More
If you remember Gordon Geko from Wall Street staring Michael Douglas and Charlie Sheen making his speech to Toldar Stock Holders, Greed is Good, well we are there again. Tonight we continue looking at the changes the SBA is making and the reason for it. As I have been writing about all week, LIBOR is now the new rate of choice for SBA Lenders.
For more on SBA Financing and what this really means visit loanforbiz.com and request our 10 FREE Special Reports which will help you get your loan closed.
But what I have not shared with you till now is the real reason why the lenders will come back to the market. GREED, Yes GREED with a capital "G". If we look at how the lenders fund loans it will become very apparent. Most of the banks are paying LIBOR rates for their cost of funds. So if they can now charge 300 basis points greater than LIBOR and on top of that they can add their spread, its no wonder the secondary market will return.
Now I'm not trying to insinuate that the lenders are not trying to stimulate the economy by lending again, but they are certainly not doing this to be altruistic. Lenders are in the business of lending money and if they can lend their money and make a profit then I say good for them, but more importantly good for us.
I want to close tonight's blog with a snippet from Entrepreneur's Magazine INC.
"The upshot for borrowers is that they'll have to pay more. But in the SBA's view, that's OK. "The challenge small businesses face today is not the cost of capital, it is access to capital,” Acting SBA Administrator Sandy K. Baruah said in a press release. “Interest rates are at historically low levels meaning money is inexpensive, yet lenders aren't lending and borrowers aren't borrowing. This indicates markets are frozen due to liquidity concerns."
Not surprisingly, the downturn seems to have had a greater impact on start-ups, though only slightly so: their share of total SBA loan dollars has fallen a few points, while existing firms' share has grown...."
For more on SBA Financing and what this really means visit loanforbiz.com and request our 10 FREE Special Reports which will help you get your loan closed.
But what I have not shared with you till now is the real reason why the lenders will come back to the market. GREED, Yes GREED with a capital "G". If we look at how the lenders fund loans it will become very apparent. Most of the banks are paying LIBOR rates for their cost of funds. So if they can now charge 300 basis points greater than LIBOR and on top of that they can add their spread, its no wonder the secondary market will return.
Now I'm not trying to insinuate that the lenders are not trying to stimulate the economy by lending again, but they are certainly not doing this to be altruistic. Lenders are in the business of lending money and if they can lend their money and make a profit then I say good for them, but more importantly good for us.
I want to close tonight's blog with a snippet from Entrepreneur's Magazine INC.
"The upshot for borrowers is that they'll have to pay more. But in the SBA's view, that's OK. "The challenge small businesses face today is not the cost of capital, it is access to capital,” Acting SBA Administrator Sandy K. Baruah said in a press release. “Interest rates are at historically low levels meaning money is inexpensive, yet lenders aren't lending and borrowers aren't borrowing. This indicates markets are frozen due to liquidity concerns."
Not surprisingly, the downturn seems to have had a greater impact on start-ups, though only slightly so: their share of total SBA loan dollars has fallen a few points, while existing firms' share has grown...."
Wednesday, November 19, 2008
Daily Observation - More Help for SBA
This evening I again want to stay on the topic of SBA financing. As I wrote yesterday and shared with over 35 people this morning SBA is getting an overhaul. The ultimate goal of the overhaul is to bring back the secondary market. If we are successful in getting the secondary market back, then SBA 7A loans as we knew them a year ago will come back again. The lenders will have a place to sell their loans and then hey will be more willing to lend again.
If the lenders do not have a place to sell their loans then they are left portfolioing the loans and they will continue to remain very skittish on new loans. They will only fund the cream of the crop. Below is a copy of a senate proposal that is being raised to help bolster small business and small business financing.
For more on how we can benefit your small business please visit loanforbiz.com, while there sign up for your FREE 10 Special Reports to help you get your next loan closed.
SOURCE U.S. Senate Committee on Small Business & Entrepreneurship
Sen. John Kerry (D-MA), Chairman of the Senate Committee on Small Business and Entrepreneurship, and Sen. Charles Schumer (D-NY), a senior member of the Senate Committee on Banking, are urging their Republican colleagues to put politics aside and help America's entrepreneurs stressed by a worsening economic climate. Several small business proposals within the economic stimulus package introduced this week would help alleviate the credit crunch, providing much-needed help to small firms.
"As the lifeblood of our economy, small business owners bear much of the burden when our system struggles," said Kerry. "To keep our economy moving we need to help these everyday Americans who are pleading for help as they try to pay their bills and stock their shelves for the holiday season."
When credit from the private sector is frozen, small firms rely on the Small Business Administration's (SBA) loan programs to free up credit. The stimulus provides $620 million targeted to help firms gain greater access to these SBA loans. Of that money, $615 million would temporarily eliminate fees charged to borrowers and lenders who participate in these government-backed programs, helping to support $22.5 billion in loans to entrepreneurs. Additionally, $1 million is provided to support $8.5 million in microloans and $4 million for microloan counseling. These actions would free up credit, give small businesses more outlets for help and allow firms to create and retain jobs in these tough economic times.
"Small businesses are looking to us for immediate help and leadership," said Kerry. "Entrepreneurs can't afford to wait another month, or more, for the rescue package to begin working. And frankly, neither can our economy or the hundreds of thousands in need of jobs.
"With the credit markets tighter than ever and the economy plunging in to greater turmoil every day, we need every tool in the toolbox to ensure small businesses across the country get the loans they need," Schumer said. "For many right now, government loans could be the only option. Our plan will reduce needless fees and streamline the process so businesses don't have to wait months and pay through the nose to get the lines of credit they need."
Copyright (C) 2008 PR Newswire. All rights reserved
If the lenders do not have a place to sell their loans then they are left portfolioing the loans and they will continue to remain very skittish on new loans. They will only fund the cream of the crop. Below is a copy of a senate proposal that is being raised to help bolster small business and small business financing.
For more on how we can benefit your small business please visit loanforbiz.com, while there sign up for your FREE 10 Special Reports to help you get your next loan closed.
SOURCE U.S. Senate Committee on Small Business & Entrepreneurship
Sen. John Kerry (D-MA), Chairman of the Senate Committee on Small Business and Entrepreneurship, and Sen. Charles Schumer (D-NY), a senior member of the Senate Committee on Banking, are urging their Republican colleagues to put politics aside and help America's entrepreneurs stressed by a worsening economic climate. Several small business proposals within the economic stimulus package introduced this week would help alleviate the credit crunch, providing much-needed help to small firms.
"As the lifeblood of our economy, small business owners bear much of the burden when our system struggles," said Kerry. "To keep our economy moving we need to help these everyday Americans who are pleading for help as they try to pay their bills and stock their shelves for the holiday season."
When credit from the private sector is frozen, small firms rely on the Small Business Administration's (SBA) loan programs to free up credit. The stimulus provides $620 million targeted to help firms gain greater access to these SBA loans. Of that money, $615 million would temporarily eliminate fees charged to borrowers and lenders who participate in these government-backed programs, helping to support $22.5 billion in loans to entrepreneurs. Additionally, $1 million is provided to support $8.5 million in microloans and $4 million for microloan counseling. These actions would free up credit, give small businesses more outlets for help and allow firms to create and retain jobs in these tough economic times.
"Small businesses are looking to us for immediate help and leadership," said Kerry. "Entrepreneurs can't afford to wait another month, or more, for the rescue package to begin working. And frankly, neither can our economy or the hundreds of thousands in need of jobs.
"With the credit markets tighter than ever and the economy plunging in to greater turmoil every day, we need every tool in the toolbox to ensure small businesses across the country get the loans they need," Schumer said. "For many right now, government loans could be the only option. Our plan will reduce needless fees and streamline the process so businesses don't have to wait months and pay through the nose to get the lines of credit they need."
Copyright (C) 2008 PR Newswire. All rights reserved
Tuesday, November 18, 2008
Daily Observation - There Is A Choice
SBA has shared more guidelines as to the upcoming change from Prime to LIBOR and in the nutshell a Lender has the option of staying with Prime or changing to LIBOR. I am now going to copy a great deal from the SBA Update Notice that we just received so you can get a true flavor of what is going on and more importantly as to why it is being changed. Enjoy the balance of the article. For more on SBA financing visit loanforbiz.com and make sure you sign up for your 10 FREE Special Reports on Getting Your Loan Closed.
Background
Under SBA’s loan guaranty program, greater numbers of small businesses can obtain loans from banks, small business lending companies, credit unions, and other participating financial institutions, because the Agency provides various incentives and risk mitigators to make these loans profitable for lenders. However, the recent turmoil and uncertainty in the financial markets have seriously affected SBA lenders’ cost of funds, their ability to sell SBA loans in the Secondary Market, and their liquidity. This has led to severely reduced small business access to capital (including SBA lending) at a critical juncture for the U.S. economy.
Due to the globalization of the financial markets, many SBA lenders’ source and cost of funds (and/or internal yield model) is partially or completely based on the London Interbank Offered Rate (LIBOR) rather than the Prime Rate, which traditionally has been SBA’s base interest rate for establishing the maximum interest rate lenders can charge for SBA-guaranteed loans. As a result, increasing numbers of lenders use LIBOR as the base rate for their internal business models and for pricing their loans. SBA’s requirement for lenders to use the Prime Rate to price 7(a) loans unnecessarily complicates their business practices and expands their risk, which increases their costs for making such loans.
Historically, LIBOR rates, which are shorter term interbank lending rates, have consistently been about 3 percentage points less than the Prime Rate, which has historically been the lending rate charged by U.S. banks to their best customers. This 3 percentage point differential between many of SBA’s lenders’ cost of funds and the Prime Rate, which is the basis for SBA’s interest rate maximums, has helped SBA lenders to profitably make small business loans. However, due to the recent volatility and uncertainty of the international financial markets, the 3 percent spread between LIBOR and Prime has been greatly reduced, and on some days LIBOR has actually exceeded the Prime Rate. As LIBOR rates more closely approximate the Prime Rate, SBA’s lenders cannot profitably make SBA loans based on the Prime Rate. As a result, they have substantially reduced or eliminated their SBA lending in recent months.
With the uncertainty in the financial markets, the convergence of Prime and LIBOR rates, and the allowable interest rate charged on SBA loans being based on the Prime Rate, SBA lenders are encountering significant problems with selling their SBA loans on the secondary market. Also, with LIBOR based funds being the source of funds for many secondary market investors, the convergence of LIBOR and Prime Rates has reduced the demand for SBA backed securities. As a result, many lenders are experiencing major liquidity problems and have greatly limited or discontinued their secondary market activities, which has limited their capacity to make SBA loans.
Changes in SBA Regulation and SOP
As a result of these issues, and following discussions with the lending industry, SBA has concluded that allowing lenders to use an adjusted thirty day (one month) LIBOR rate as a base rate for pricing SBA loans will ameliorate several of the factors that are impeding small businesses’ access to capital through SBA’s guaranteed loan programs. SBA is allowing an adjustment of 3 percentage points to the thirty day (one month) LIBOR rate to reflect the historical 3 percentage point spread between the LIBOR and the Prime Rate and to help reduce the uncertainty and the financial risk to lenders and to secondary market participants.
The Agency has therefore revised its regulation at 13 CFR 120.214(c) and, henceforth, the allowable base rate establishing the maximum interest rate lenders may charge for SBA 7(a) loans will be the following: 1) Prime Rate; 2) Thirty day (1 Month) London Interbank Offered Rate plus 3 percentage points; or 3) Optional Peg Rate. The Prime or LIBOR rate will be that rate which is in effect on the first business day of the month, as identified in a national financial newspaper or newspaper website each business day. These changes are applicable to 7(a) loan applications that lenders may currently have in process, but they are not applicable to loan applications that have already been received by SBA.
Background
Under SBA’s loan guaranty program, greater numbers of small businesses can obtain loans from banks, small business lending companies, credit unions, and other participating financial institutions, because the Agency provides various incentives and risk mitigators to make these loans profitable for lenders. However, the recent turmoil and uncertainty in the financial markets have seriously affected SBA lenders’ cost of funds, their ability to sell SBA loans in the Secondary Market, and their liquidity. This has led to severely reduced small business access to capital (including SBA lending) at a critical juncture for the U.S. economy.
Due to the globalization of the financial markets, many SBA lenders’ source and cost of funds (and/or internal yield model) is partially or completely based on the London Interbank Offered Rate (LIBOR) rather than the Prime Rate, which traditionally has been SBA’s base interest rate for establishing the maximum interest rate lenders can charge for SBA-guaranteed loans. As a result, increasing numbers of lenders use LIBOR as the base rate for their internal business models and for pricing their loans. SBA’s requirement for lenders to use the Prime Rate to price 7(a) loans unnecessarily complicates their business practices and expands their risk, which increases their costs for making such loans.
Historically, LIBOR rates, which are shorter term interbank lending rates, have consistently been about 3 percentage points less than the Prime Rate, which has historically been the lending rate charged by U.S. banks to their best customers. This 3 percentage point differential between many of SBA’s lenders’ cost of funds and the Prime Rate, which is the basis for SBA’s interest rate maximums, has helped SBA lenders to profitably make small business loans. However, due to the recent volatility and uncertainty of the international financial markets, the 3 percent spread between LIBOR and Prime has been greatly reduced, and on some days LIBOR has actually exceeded the Prime Rate. As LIBOR rates more closely approximate the Prime Rate, SBA’s lenders cannot profitably make SBA loans based on the Prime Rate. As a result, they have substantially reduced or eliminated their SBA lending in recent months.
With the uncertainty in the financial markets, the convergence of Prime and LIBOR rates, and the allowable interest rate charged on SBA loans being based on the Prime Rate, SBA lenders are encountering significant problems with selling their SBA loans on the secondary market. Also, with LIBOR based funds being the source of funds for many secondary market investors, the convergence of LIBOR and Prime Rates has reduced the demand for SBA backed securities. As a result, many lenders are experiencing major liquidity problems and have greatly limited or discontinued their secondary market activities, which has limited their capacity to make SBA loans.
Changes in SBA Regulation and SOP
As a result of these issues, and following discussions with the lending industry, SBA has concluded that allowing lenders to use an adjusted thirty day (one month) LIBOR rate as a base rate for pricing SBA loans will ameliorate several of the factors that are impeding small businesses’ access to capital through SBA’s guaranteed loan programs. SBA is allowing an adjustment of 3 percentage points to the thirty day (one month) LIBOR rate to reflect the historical 3 percentage point spread between the LIBOR and the Prime Rate and to help reduce the uncertainty and the financial risk to lenders and to secondary market participants.
The Agency has therefore revised its regulation at 13 CFR 120.214(c) and, henceforth, the allowable base rate establishing the maximum interest rate lenders may charge for SBA 7(a) loans will be the following: 1) Prime Rate; 2) Thirty day (1 Month) London Interbank Offered Rate plus 3 percentage points; or 3) Optional Peg Rate. The Prime or LIBOR rate will be that rate which is in effect on the first business day of the month, as identified in a national financial newspaper or newspaper website each business day. These changes are applicable to 7(a) loan applications that lenders may currently have in process, but they are not applicable to loan applications that have already been received by SBA.
Monday, November 17, 2008
Daily Observations - LIBOR is IN
The SBA has formally announced today that the new preferred index is LIBOR. As for Prime we are not sure as of this writing if Prime is completely out or the lender has an option to go with LIBOR or Prime. What we do know is that if you have filed for and received an SBA number for deals in transition you will continue to stay at the index that was presented and approved by the SBA.
Should the lender want to change to the more aggressive LIBOR rate they would have to cancel the SBA control number that was issued and re-apply for a new number. SBA will now have to change all of their base assumptions to the following.
Index - LIBOR
Pricing to get to the base index is LIBOR plus 300 basis points
Lender can then add up to another 275 basis points.
LIBOR Rate is the One month LIBOR
Which now means that loans are to be adjusted monthly rather than quarterly as they have been over the last decade or so.
As I shared with you a few posts ago this should bring the secondary market back and thus lenders will start to free up credit to stimulate small business, and thus start to stimulate the economy as a whole. There are also other provision which the new administration is recommending that will also help grow the economy. I will share those as they become available.
As we find out more about the LIBOR change I will continue to bring to this blog that information. Should you want to know more about SBA Financing please visit loanforbiz.com. To get your 10 FREE Special Reports sign up here.
Should the lender want to change to the more aggressive LIBOR rate they would have to cancel the SBA control number that was issued and re-apply for a new number. SBA will now have to change all of their base assumptions to the following.
Index - LIBOR
Pricing to get to the base index is LIBOR plus 300 basis points
Lender can then add up to another 275 basis points.
LIBOR Rate is the One month LIBOR
Which now means that loans are to be adjusted monthly rather than quarterly as they have been over the last decade or so.
As I shared with you a few posts ago this should bring the secondary market back and thus lenders will start to free up credit to stimulate small business, and thus start to stimulate the economy as a whole. There are also other provision which the new administration is recommending that will also help grow the economy. I will share those as they become available.
As we find out more about the LIBOR change I will continue to bring to this blog that information. Should you want to know more about SBA Financing please visit loanforbiz.com. To get your 10 FREE Special Reports sign up here.
Sunday, November 16, 2008
FREE 10 Special Reports to GET Your Loan Closed!
Understanding the Commercial and Business Loan Approval process has never been easier.
Now YOU can learn the 10 Secrets your lender does NOT want you to know and close MORE loans today with Harlan Friedman’s new book GET Your Loan Closed!
As an introduction to the book we are giving away these 10 FREE Special Reports, Sign up today at http://www.getyourloanclosed.com.
Key Topics Covered In The Book Are:
The Loan Approval Process In Today’s Economy
The Right Loan Program
The Right Lender
Your Credit Score
Cash Flow
Commercial Appraisals
Collateral
Experience
Down Payments
Packaging
Commercial Loan Terms
If you've ever thought, "I don’t know what to say, or what information to provide to bankers, real estate brokers or even to sellers”…this guide will be your best friend!
Dozens of questions, answers and examples are packed into this guide, sharing the “Ten Secrets Your Lender Does Not Want You To Know” while giving you the very words to say when addressing lenders you will be more in control of the lending process.
Sign up today at http://www.getyourloanclosed.com and receive your first report immediately.
Now YOU can learn the 10 Secrets your lender does NOT want you to know and close MORE loans today with Harlan Friedman’s new book GET Your Loan Closed!
As an introduction to the book we are giving away these 10 FREE Special Reports, Sign up today at http://www.getyourloanclosed.com.
Key Topics Covered In The Book Are:
The Loan Approval Process In Today’s Economy
The Right Loan Program
The Right Lender
Your Credit Score
Cash Flow
Commercial Appraisals
Collateral
Experience
Down Payments
Packaging
Commercial Loan Terms
If you've ever thought, "I don’t know what to say, or what information to provide to bankers, real estate brokers or even to sellers”…this guide will be your best friend!
Dozens of questions, answers and examples are packed into this guide, sharing the “Ten Secrets Your Lender Does Not Want You To Know” while giving you the very words to say when addressing lenders you will be more in control of the lending process.
Sign up today at http://www.getyourloanclosed.com and receive your first report immediately.
Thursday, November 13, 2008
Daily Observations - SBA Updates
WASHINGTON, DC – In response to the credit crunch, today SBA’s Acting Administrator Sandy K. Baruah announced important loan program changes to help the agency’s lending partners increase access to capital for small businesses.
First, an interim final rule allowing new SBA loans to be made with an alternative base interest rate, the one month LIBOR rate (London Interbank Offered Rate), in addition to the prime rate, which was previously allowed. In the past 60 days, both the prime and LIBOR rates have not yet returned to their historical relationship—of roughly 300 basis points between the two rates. The mismatch between the rates is squeezing SBA lenders out of the lending market, since their costs are based on the LIBOR rate.
"This change will help more small businesses obtain capital to grow their businesses and create new jobs," Baruah said. "By allowing both rates, SBA is making its programs more flexible, increasing opportunities to access capital and giving both lending partners and small business customers more options to meet their needs."
The second change allows a new structure for assembling SBA loans into pools for sale in the secondary market. The enhanced flexibility in loan pool structures can help affect profitability and liquidity in the secondary market for SBA guaranteed loans, especially with the current market conditions. Because the average interest rate is used, these pools are easier for pool assemblers to create, thus providing incentives for more investors to bid on these loans.
"The challenge small businesses face today is not the cost of capital, it is access to capital," said Baruah. "Interest rates are at historically low levels meaning money is inexpensive, yet lenders aren’t lending and borrowers aren’t borrowing. This indicates markets are frozen due to liquidity concerns. This interim final rule is an important step to reenergize the lenders to make SBA-backed loans and will help open the gateway of capital for entrepreneurs."
"SBA moved quickly on these changes after consulting with small businesses, lending partners
and other government agencies," said Eric R. Zarnikow, SBA’s Associate Administrator for the
Office of Capital Access. "We’re confident these solutions will help free up capital so lenders can continue to make SBA-backed loans."
By addressing market issues that were impeding the funding streams for both lenders and small businesses, SBA is making capital more available to America’s small businesses. The SBA will be issuing additional technical guidance to lenders in the coming weeks relating to the implementation of these important changes.
What this means in theory is that the lenders should be returning back to the capital markets, but as I said in theory only time will tell.
Wednesday, November 12, 2008
Daily Observations - "Games People Play"
Too many people are playing games. The lenders don't want to commit because they don't want to be "stuck" with an interest rate that in the long run is going to have them losing money. For that reason we are seeing less and less fixed rate proposals.
Borrowers are playing games these days as well. I'm not saying that the borrowers don't want to commit but because they are unsure where interest rates as well as this economy is heading they are very skeptical. They want to pull the trigger but something is preventing them from moving ahead. We are spending more and more unproductive time with borrowers that are afraid to move forward.
We have to make sure throughout our due diligence, and project gathering stage that they really want to finance their project. Wanting to finance and doing it are turning out to be two different things. If you are a potential borrower reading this I do not mean to aggravate you, but I do mean to have you personally examine if you want to move forward or not.
Going from lender to lender to get the best deal is no longer an option. In addition the lenders talk to each other and its very easy to find out if you are shopping a deal, especially when the lender checks the credit report and sees various inquiries from their competitors in the same time frame.
As brokers we are also told by our faithful lenders if the client is shopping us. Regretfully once a lender knows they are being shopped they usually do not want the deal anymore. Every lender wants an exclusive, so please remember that.
Lastly if you are a broker show loyalty to your lenders it will pay you back hundredfold when this economy comes back, as we all know it will. Remember to sign up at GET Your Loan Closed for our new 10 FREE Special Reports.
Borrowers are playing games these days as well. I'm not saying that the borrowers don't want to commit but because they are unsure where interest rates as well as this economy is heading they are very skeptical. They want to pull the trigger but something is preventing them from moving ahead. We are spending more and more unproductive time with borrowers that are afraid to move forward.
We have to make sure throughout our due diligence, and project gathering stage that they really want to finance their project. Wanting to finance and doing it are turning out to be two different things. If you are a potential borrower reading this I do not mean to aggravate you, but I do mean to have you personally examine if you want to move forward or not.
Going from lender to lender to get the best deal is no longer an option. In addition the lenders talk to each other and its very easy to find out if you are shopping a deal, especially when the lender checks the credit report and sees various inquiries from their competitors in the same time frame.
As brokers we are also told by our faithful lenders if the client is shopping us. Regretfully once a lender knows they are being shopped they usually do not want the deal anymore. Every lender wants an exclusive, so please remember that.
Lastly if you are a broker show loyalty to your lenders it will pay you back hundredfold when this economy comes back, as we all know it will. Remember to sign up at GET Your Loan Closed for our new 10 FREE Special Reports.
Tuesday, November 11, 2008
Daily Observations - "Push" the Client
I received an e-mail today from one of my lenders and he ended the e-mail with:
Make this deal happen before it may go away.
What was this lender trying to share with me? Was he saying that if we don't get this LOI executed now, today, that this lender may not be doing these loans tomorrow? Or was he saying that the deal that is strong today will not be considered strong tomorrow, or was he just pushing me to get a deal closed because he has not closed any deals and his job may be on the line?
None of these reasons really matter. The point is we have to now push our clients when lenders are offering to fund transactions. I have never been a "pushy" salesperson, but today I have become one, not for my benefit but for the benefit of my clients. If your clients really want a loan they have to move quickly. No longer can they spend time shopping around from lender to lender, if an LOI is proffered let them sign it and start the process of documentation gathering immediately.
Because tomorrow is another day, and who know what banks are going to fail, or what lender is going to stop lending. Even today I received an e-mail from a new company that is specializing in displaced SBA lenders. They are trying to re-brand them and get them back into the job market. Share this with your clients today, and get them to take action. Anything that you can motivate them with is fair game.
Make sure you sign up for our 10 FREE Special Reports to help you get more loans closed in 2009.
Make this deal happen before it may go away.
What was this lender trying to share with me? Was he saying that if we don't get this LOI executed now, today, that this lender may not be doing these loans tomorrow? Or was he saying that the deal that is strong today will not be considered strong tomorrow, or was he just pushing me to get a deal closed because he has not closed any deals and his job may be on the line?
None of these reasons really matter. The point is we have to now push our clients when lenders are offering to fund transactions. I have never been a "pushy" salesperson, but today I have become one, not for my benefit but for the benefit of my clients. If your clients really want a loan they have to move quickly. No longer can they spend time shopping around from lender to lender, if an LOI is proffered let them sign it and start the process of documentation gathering immediately.
Because tomorrow is another day, and who know what banks are going to fail, or what lender is going to stop lending. Even today I received an e-mail from a new company that is specializing in displaced SBA lenders. They are trying to re-brand them and get them back into the job market. Share this with your clients today, and get them to take action. Anything that you can motivate them with is fair game.
Make sure you sign up for our 10 FREE Special Reports to help you get more loans closed in 2009.
Monday, November 10, 2008
Daily Observations - Sure Way To Kill a Deal
Tonight I want to share what I thought was common sense, but to my dismay may not be understood by the mortgage community, and certainly is not understood or acknowedged by your clients.
It is a DEAL KILLER if a property that you are trying to get financed is listed in any MLS, or if not in an MLS as a FSBO. If the appraiser goes out to the property and sees a For Sale Sign, your client will get billed for a worthless appraisal as the lender will not move forward. This is not a policy question where may be we could get an override, this is a fact!
No lender is going to lend you money for any refinancing, business expansion, working capital etc, if they know you are trying to sell the building and or the business. Saying that if you are trying to sell the business opportunity only, and the seller is going to keep the real estate you may be able to get around this, providing there has been historical cash flows, etc. to meet the required debt service coverage ratio as well as appropriate net operating income for the loan requirement.
For more on debts service coverage ratio and calculation of net operating income and lots more valuable and timely information sign up for our 10 Free Special Reports, available now.
It is a DEAL KILLER if a property that you are trying to get financed is listed in any MLS, or if not in an MLS as a FSBO. If the appraiser goes out to the property and sees a For Sale Sign, your client will get billed for a worthless appraisal as the lender will not move forward. This is not a policy question where may be we could get an override, this is a fact!
No lender is going to lend you money for any refinancing, business expansion, working capital etc, if they know you are trying to sell the building and or the business. Saying that if you are trying to sell the business opportunity only, and the seller is going to keep the real estate you may be able to get around this, providing there has been historical cash flows, etc. to meet the required debt service coverage ratio as well as appropriate net operating income for the loan requirement.
For more on debts service coverage ratio and calculation of net operating income and lots more valuable and timely information sign up for our 10 Free Special Reports, available now.
Thursday, November 6, 2008
Daily observations - LIBOR, we Need you now
What am I talking about?
Well I just heard today that the SBA is seriously considering over the next couple of months to move from prime based pricing to LIBOR based pricing. Below you will find an explanation of what LIBOR is. (London Interchange Bank Offered Rate)
An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.
The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based.
So you must be asking why should I care if SBA is prime based or LIBOR based?
The answer in the nutshell is that if LIBOR is the pricing index, then there will be a secondary market for these loans. If we can bring back a secondary market we will once again be able to have aggressive lending in the 7A arena.
So tonight pray for LIBOR, well maybe don't pray but ask persuasively to your guardian angel.
Visit loanforbiz for more info on this and other SBA related issues, also sign up to request information on our free 10 Special reports on commercial lending.
Well I just heard today that the SBA is seriously considering over the next couple of months to move from prime based pricing to LIBOR based pricing. Below you will find an explanation of what LIBOR is. (London Interchange Bank Offered Rate)
An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.
The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based.
So you must be asking why should I care if SBA is prime based or LIBOR based?
The answer in the nutshell is that if LIBOR is the pricing index, then there will be a secondary market for these loans. If we can bring back a secondary market we will once again be able to have aggressive lending in the 7A arena.
So tonight pray for LIBOR, well maybe don't pray but ask persuasively to your guardian angel.
Visit loanforbiz for more info on this and other SBA related issues, also sign up to request information on our free 10 Special reports on commercial lending.
Wednesday, November 5, 2008
Daily Obervation - Commercial Real Estate Report
The following information is directly pasted from an e-mail that I received today from the Federal Reserve Bank of San Francisco – Division of Banking Supervision & Regulation. The gist of the report is that the market is tighter than it was six months ago, but there is still opportunity.
Stay focused and open minded as you read this. You may have to read it twice as I did to get the "good" from it. For those who would like the entire report send me an email As my regular readers know I don't usually cut and paste other peoples reports but this is a must read.
CRE Market Conditions & Outlook *
Executive Summary
• Market fundamentals and outlook: The outlook for commercial real estate (defined in this report as income property) is deteriorating due to the slowing economy, the ongoing paralysis in credit markets, wide CMBS spreads, and more costly financing for CRE transactions and projects.
CRE property sales transactions have dropped off dramatically with financing more difficult to obtain and more costly. Vacancy rates are rising and rent growth is slowing as the economy slows.
CRE markets will continue to weaken but should avoid the kind of collapse seen in residential real estate.
CRE markets are not overbuilt as they were in the late 1980s. For example, the office completion rate (as a percentage of existing stock) was a minimal 1.4% in 2006 and 1.7% in 2007, compared to an average yearly rate of nearly 6% in the 1980s.
Supply and demand remain reasonably balanced with vacancy rates expected to increase moderately as tenant demand softens over the next year, but only to levels below those of 2001-2002 period.
Rent growth should remain positive in most local markets as rents rollover from those set in 2002-2003.
PS: The Special Reports that I have alluded to over the last thirty days are complete. Our new website for our book is a week away at most. So please if you want the Ten Secrets Your Lender Does Not Want You To Know send me an e-mail and we should be able to start delivering the free ten reports by Monday. You will need to confirm the return e-mail to opt into this special mailing.
Stay focused and open minded as you read this. You may have to read it twice as I did to get the "good" from it. For those who would like the entire report send me an email As my regular readers know I don't usually cut and paste other peoples reports but this is a must read.
CRE Market Conditions & Outlook *
Executive Summary
• Market fundamentals and outlook: The outlook for commercial real estate (defined in this report as income property) is deteriorating due to the slowing economy, the ongoing paralysis in credit markets, wide CMBS spreads, and more costly financing for CRE transactions and projects.
CRE property sales transactions have dropped off dramatically with financing more difficult to obtain and more costly. Vacancy rates are rising and rent growth is slowing as the economy slows.
CRE markets will continue to weaken but should avoid the kind of collapse seen in residential real estate.
CRE markets are not overbuilt as they were in the late 1980s. For example, the office completion rate (as a percentage of existing stock) was a minimal 1.4% in 2006 and 1.7% in 2007, compared to an average yearly rate of nearly 6% in the 1980s.
Supply and demand remain reasonably balanced with vacancy rates expected to increase moderately as tenant demand softens over the next year, but only to levels below those of 2001-2002 period.
Rent growth should remain positive in most local markets as rents rollover from those set in 2002-2003.
PS: The Special Reports that I have alluded to over the last thirty days are complete. Our new website for our book is a week away at most. So please if you want the Ten Secrets Your Lender Does Not Want You To Know send me an e-mail and we should be able to start delivering the free ten reports by Monday. You will need to confirm the return e-mail to opt into this special mailing.
Tuesday, November 4, 2008
Daily Observation - 7.72% a record High
Explaining the November 504 rate. This is a sizeable jump in the CDC Debenture 20 year bond. We've gone up over 75 basis points from the previous month.
After months of relatively stable SBA lending rates in a highly volatile market, the turmoil in the credit markets has impacted the 504 loan rate.
There are two key reasons for the unusual rate increase for November: - A rise in treasury rates- Record wide spreads in the government-guaranteed debt market
We believe this situation, created by extraordinary circumstances in the credit markets, is temporary. It’s expected that the markets and rates will settle down in first quarter 2009.
The above is a quote from one of our local CDC.
So as you can see as the rest of the credit markets supposedly loosen up, we are seeing SBA rates and programs getting tighter each and every day. Use this to your advantage and "sell" the 504 look-a-like programs which today are still below 7.0%, some lenders that we are dealing with are actually in the 6.75% range. There is no better time for your clients or for yourself to buy that building that you are currently paying rent for, or to stop being a tenant and move your business to your own building.
With 10% down and rates below 7.0% act now! For information on our SBA 504 look-a-like loan visit loanforbiz.
After months of relatively stable SBA lending rates in a highly volatile market, the turmoil in the credit markets has impacted the 504 loan rate.
There are two key reasons for the unusual rate increase for November: - A rise in treasury rates- Record wide spreads in the government-guaranteed debt market
We believe this situation, created by extraordinary circumstances in the credit markets, is temporary. It’s expected that the markets and rates will settle down in first quarter 2009.
The above is a quote from one of our local CDC.
So as you can see as the rest of the credit markets supposedly loosen up, we are seeing SBA rates and programs getting tighter each and every day. Use this to your advantage and "sell" the 504 look-a-like programs which today are still below 7.0%, some lenders that we are dealing with are actually in the 6.75% range. There is no better time for your clients or for yourself to buy that building that you are currently paying rent for, or to stop being a tenant and move your business to your own building.
With 10% down and rates below 7.0% act now! For information on our SBA 504 look-a-like loan visit loanforbiz.
Monday, November 3, 2008
Daily Observations - Stated Income?
Well I found a lender today that was still doing stated commercial loans at what price though.
With Silverhill and Interbay very limited on their exposure to the lending environment, someone or some companies had to pick up the slack of what I personally referred to as quasi-hard money lenders. Those lenders that charge between three and five percent higher than the going rate as well as increased points but not to the extent of 14 to 18% and eight to twelve points as some of the hard money rates I've seen quoted.
They were running between 9 1/2 to 11 1/2% depending if we are able to go full doc or not. if we went stated income we were well into the 10% rate at par to us. But why am I talking about this tonight, the reason is for you to know that there is still a viable alternative in the stated income arena. Expensive yes, but still available.
To go stated income this lender requires that you be self-employed for at least two years. If you can substantiate through proof that you were self-employed for at least the last two years they will allow you to proceed under their stated income program.
Because they are a direct lender they can afford to hold the paper and be selective of the deals they want to look at. Requirements are basically the same as traditional lenders except that they are going to take out a larger percentage from the net operating income for TILC, as well as vacancy and management. Lastly their pre-payments are going to be much stiffer than traditional commercial loans. But the bottom line is if you have a client that is in desperate need for financing this quasi- hard money lender may be your answer.
Please do not deluge me with questions as to who this lender is, just know that there are quasi-hard money lenders that will take a look at stated income under the right circumstances.
For more on our lending programs visit loanforbiz.
With Silverhill and Interbay very limited on their exposure to the lending environment, someone or some companies had to pick up the slack of what I personally referred to as quasi-hard money lenders. Those lenders that charge between three and five percent higher than the going rate as well as increased points but not to the extent of 14 to 18% and eight to twelve points as some of the hard money rates I've seen quoted.
They were running between 9 1/2 to 11 1/2% depending if we are able to go full doc or not. if we went stated income we were well into the 10% rate at par to us. But why am I talking about this tonight, the reason is for you to know that there is still a viable alternative in the stated income arena. Expensive yes, but still available.
To go stated income this lender requires that you be self-employed for at least two years. If you can substantiate through proof that you were self-employed for at least the last two years they will allow you to proceed under their stated income program.
Because they are a direct lender they can afford to hold the paper and be selective of the deals they want to look at. Requirements are basically the same as traditional lenders except that they are going to take out a larger percentage from the net operating income for TILC, as well as vacancy and management. Lastly their pre-payments are going to be much stiffer than traditional commercial loans. But the bottom line is if you have a client that is in desperate need for financing this quasi- hard money lender may be your answer.
Please do not deluge me with questions as to who this lender is, just know that there are quasi-hard money lenders that will take a look at stated income under the right circumstances.
For more on our lending programs visit loanforbiz.
Thursday, October 30, 2008
Daily Observations - 85% or Better
Very short and to the point this evening.
Only work on deals that you believe have an 85% chance or better to get funded. Don't be hesitant to share this with your prospective clients, they will respect you for this. We have never had to tell no to so many people and they understand it's not your fault.
But on the converse if you tell someone you have an 85% chance of getting the loan approved, then make sure that you do everything within your power and control to get that loan closed. Keep your client informed as to every step that is occurring. If you are getting denials from the lender find out why, then go back to your client and see if the reason is surmountable. If it is, go back to work, if it's not release the client "politely".
You are not doing your client any service by keeping them hanging on as you try to continue to fight the uphill battle. We have to face reality and that is right now lenders as I mentioned in my last blog have the ability to cherry pick the best and strongest loans.
Remember pre-qualify tougher than you ever did before and if they pass the PQ test don't leave any stone unturned as you look for financing for them. Apply what I coined as the self test, Would you lend them your hard earned money?, if yes go to work, if not tell them why not and allow them if able to "fix" the issues that you see.
Visit loanforbiz for more on pre-qualifying clients.
Only work on deals that you believe have an 85% chance or better to get funded. Don't be hesitant to share this with your prospective clients, they will respect you for this. We have never had to tell no to so many people and they understand it's not your fault.
But on the converse if you tell someone you have an 85% chance of getting the loan approved, then make sure that you do everything within your power and control to get that loan closed. Keep your client informed as to every step that is occurring. If you are getting denials from the lender find out why, then go back to your client and see if the reason is surmountable. If it is, go back to work, if it's not release the client "politely".
You are not doing your client any service by keeping them hanging on as you try to continue to fight the uphill battle. We have to face reality and that is right now lenders as I mentioned in my last blog have the ability to cherry pick the best and strongest loans.
Remember pre-qualify tougher than you ever did before and if they pass the PQ test don't leave any stone unturned as you look for financing for them. Apply what I coined as the self test, Would you lend them your hard earned money?, if yes go to work, if not tell them why not and allow them if able to "fix" the issues that you see.
Visit loanforbiz for more on pre-qualifying clients.
Wednesday, October 29, 2008
Daily Observations - SBA Guarantee Fees & Points?
Prior to this debacle there was never any points associated with SBA Loans. The only fee a client would pay was the SBA Guarantee Fee. That fee was 75% of the loan amount times either 2.0, 2.5, or 3.0% of that number. Usually lenders would also charge a $1,000 to $1,500 processing fee and that was all the fees associated with the loan with the exception of appraisal, title, escrow and any other environmental reports associated with the purchase of the real property if any.
No More...
Lenders are now charging points in addition to the above fees. The reason why, the lack of the secondary market. As I have mentioned previously six months to a year ago a lender would sell their loans to the secondary market for six to ten points. That was the way lenders would be compensated and they would then be able to offer rebates to brokers and other bankers that they were working with.
Since there is no secondary market we now see lenders beginning to charge borrowers points to cover their risk as well as increase their yield on a loan. So don't be surprised when all of a sudden you hear there are points now associated with SBA loans. This structure is going to probably be the norm as more and more lenders leave the lending SBA arena with fewer lenders chasing and cherry picking the deals they want to lend on expect this trend to continue.
For more on SBA loans visit loanforbiz.com.
No More...
Lenders are now charging points in addition to the above fees. The reason why, the lack of the secondary market. As I have mentioned previously six months to a year ago a lender would sell their loans to the secondary market for six to ten points. That was the way lenders would be compensated and they would then be able to offer rebates to brokers and other bankers that they were working with.
Since there is no secondary market we now see lenders beginning to charge borrowers points to cover their risk as well as increase their yield on a loan. So don't be surprised when all of a sudden you hear there are points now associated with SBA loans. This structure is going to probably be the norm as more and more lenders leave the lending SBA arena with fewer lenders chasing and cherry picking the deals they want to lend on expect this trend to continue.
For more on SBA loans visit loanforbiz.com.
Tuesday, October 28, 2008
Daily Observations - When Will the Lenders Return?
This is the number one question that I am being asked every day. When will they return, and start to lend money again, when will credit be freed up, when will it trickle down to us again?
I have no idea! But the important point is that everyone I talk to is waiting for that magic event to happen, Free up Credit. Credit may never be freed up again the way we have seen it over the last couple of years. If you were breathing you could get a loan.
I am here to share that there are certain boutique lenders that are still doing business opportunity loans for QUALIFIED borrowers. The best advice at this point I can share with you is stick to the 5C's +E , pre-qualify everyone and when you have a strong borrower Don't Give Up, there are lenders out there that still want good deals.
Loan packaging and presenting of the loan has never been more important than it is now. Deal with a qualified loan developer/packager and you will get your deal done, if it makes economic sense to the lender as well as to yourself. Lenders still have their prohibitive lists so stay away from those areas that most lenders do not like, ie Start-ups, Restaurants, Rolling Stock based companies.
If you are thinking about purchasing a business and are going to be looking for Gov't Assisted Financing programs like the SBA, then buy a business that is manufacturing rather than service oriented. With manufacturing there is more collateral and usually less goodwill.
Banks do not like to finance goodwill, they consider it pie in the sky, and they want the seller to carry the value of the goodwill.
For more on SBA Loans visit loanforbiz.
I have no idea! But the important point is that everyone I talk to is waiting for that magic event to happen, Free up Credit. Credit may never be freed up again the way we have seen it over the last couple of years. If you were breathing you could get a loan.
I am here to share that there are certain boutique lenders that are still doing business opportunity loans for QUALIFIED borrowers. The best advice at this point I can share with you is stick to the 5C's +E , pre-qualify everyone and when you have a strong borrower Don't Give Up, there are lenders out there that still want good deals.
Loan packaging and presenting of the loan has never been more important than it is now. Deal with a qualified loan developer/packager and you will get your deal done, if it makes economic sense to the lender as well as to yourself. Lenders still have their prohibitive lists so stay away from those areas that most lenders do not like, ie Start-ups, Restaurants, Rolling Stock based companies.
If you are thinking about purchasing a business and are going to be looking for Gov't Assisted Financing programs like the SBA, then buy a business that is manufacturing rather than service oriented. With manufacturing there is more collateral and usually less goodwill.
Banks do not like to finance goodwill, they consider it pie in the sky, and they want the seller to carry the value of the goodwill.
For more on SBA Loans visit loanforbiz.
Monday, October 27, 2008
Daily Observation - Waiting...Cost her the Deal
Tonight I want to share with you an experience that has replayed itself over and over during the last couple of months. Procrastination cost the deal. While clients were debating the interest rates, the fees or any of the other myriad of excuses for not moving forward, when they finally decided it was time to move, the lenders left the arena.
Got a call today from a potential client in AZ, she wanted us to finally move on the biz op she called me about over forty-five days ago. I regrettably told her that the lender that was offering the program which I was confident I could fund was no longer offering the program. What was she to do?
We had to go back and completely restructure the proposal, by adding in the option of her buying the building rather than renting with the option to purchase a year out. We also have to have her put up a substantial amount of collateral, something that was not even contemplated forty-five days ago.
In essence her waiting to make a decision has cost her a lot more now that we may be able to fund the deal, but all of her property will have to be collateralized and she will also have to purchase the building. The building is less than the biz op so I still have our work cut out for us to find a lender.
For more on the creative process we take visit Loanforbiz.
Got a call today from a potential client in AZ, she wanted us to finally move on the biz op she called me about over forty-five days ago. I regrettably told her that the lender that was offering the program which I was confident I could fund was no longer offering the program. What was she to do?
We had to go back and completely restructure the proposal, by adding in the option of her buying the building rather than renting with the option to purchase a year out. We also have to have her put up a substantial amount of collateral, something that was not even contemplated forty-five days ago.
In essence her waiting to make a decision has cost her a lot more now that we may be able to fund the deal, but all of her property will have to be collateralized and she will also have to purchase the building. The building is less than the biz op so I still have our work cut out for us to find a lender.
For more on the creative process we take visit Loanforbiz.
Sunday, October 26, 2008
Daily Observations - Long Term Leases May Be the Answer
As more and more lenders are saying No to lending on commercial investments for various reasons, there may be a glimmer of hope if you can structure your deal accordingly.
We had one deal for a refinance and cash out for a commercial office complex and we were told that there was too much risk. The reason there was too much risk is that the property was only 85% stabilized, and leases were considered short term; two years or less.
Three months ago the lenders would have loved this deal, but today 15% unstabilized is a MAJOR issue. Also the fact that the stabilization is not three years old or greater as I have mentioned on a previous blog was a deterrent as well.
Well, we went back to the borrower and had him go to each of his tenants to increase the term of the lease from the two years that he had to a minimum of five years in most cases. The extra three years of the lease has made the lender take another serious look at the deal. Don't know if they will fund it yet, but we have moved past the immediate no to the package gathering stage.
The point is not if they fund this one, the point is for you to always be thinking out of the box to represent your client to the best of your ability.
For more on Loanforbiz visit our website, we are still closing deals.
We had one deal for a refinance and cash out for a commercial office complex and we were told that there was too much risk. The reason there was too much risk is that the property was only 85% stabilized, and leases were considered short term; two years or less.
Three months ago the lenders would have loved this deal, but today 15% unstabilized is a MAJOR issue. Also the fact that the stabilization is not three years old or greater as I have mentioned on a previous blog was a deterrent as well.
Well, we went back to the borrower and had him go to each of his tenants to increase the term of the lease from the two years that he had to a minimum of five years in most cases. The extra three years of the lease has made the lender take another serious look at the deal. Don't know if they will fund it yet, but we have moved past the immediate no to the package gathering stage.
The point is not if they fund this one, the point is for you to always be thinking out of the box to represent your client to the best of your ability.
For more on Loanforbiz visit our website, we are still closing deals.
Thursday, October 23, 2008
Daily Observations - Biz Ops No More , WHY?
Tonight I want to address why I believe that Biz Ops or Business Opportunity loans are becoming the dinosaur of 2008.
Some people would say the reason is that the banks are being tighter on credit, and that is the reason they do not want to lend on biz ops. Others may point to the lack of collateral for a business opportunity as the reason why the lenders don't want to lend. Still others will suggest the high failure rate of businesses in today's economy. And all of these answers would be right.
BUT...
I don't believe that they are the real reasons. I think the answer is purely greed of the lending community. What do I mean, I can hear you asking yourself? The answer in plain simple English is that the banks don't have a secondary market to sell these loans to anymore.
Before this debacle lenders would sell their SBA 7A Biz op loans to the secondary market for at least five to ten points, yes you heard me correctly five to ten points. Now there is no one to buy the loans, so why do them anymore. So even if Credit is loosened up as both Presidential candidates are advocating do not expect biz ops to be re-instated unless the secondary market comes back and lenders can once again sell their loans.
For more on the lending process ask me about our 95 page Special Report, GET Your Loan Closed!
Some people would say the reason is that the banks are being tighter on credit, and that is the reason they do not want to lend on biz ops. Others may point to the lack of collateral for a business opportunity as the reason why the lenders don't want to lend. Still others will suggest the high failure rate of businesses in today's economy. And all of these answers would be right.
BUT...
I don't believe that they are the real reasons. I think the answer is purely greed of the lending community. What do I mean, I can hear you asking yourself? The answer in plain simple English is that the banks don't have a secondary market to sell these loans to anymore.
Before this debacle lenders would sell their SBA 7A Biz op loans to the secondary market for at least five to ten points, yes you heard me correctly five to ten points. Now there is no one to buy the loans, so why do them anymore. So even if Credit is loosened up as both Presidential candidates are advocating do not expect biz ops to be re-instated unless the secondary market comes back and lenders can once again sell their loans.
For more on the lending process ask me about our 95 page Special Report, GET Your Loan Closed!
Wednesday, October 22, 2008
Daily Observations - I'm So Excited
GUESS WHAT?
I found a Lender that wants to lend, they will lend on any commercial property with normal underwriting guidelines as long as there is cash flow. Almost sounds like the way it used to be. They are even closing loans regularly the BDO told me.
So what's the catch I asked Him. How can you ignore what everyone else is "hung up" on and still be closing loans regularly.
Here's his answer as long as the client will deposit 20% of the loan amount in our bank we will approve their loan subject to normal underwriting requirements.
Here's a thought...If the client has an additional 20% to be put in the bank over and beyond their down payment do you think they really need a loan? That probably means in terms of a straight commercial loan 60 to 70% down including the extra CD at the bank, with CAP rates as low as they are. I might be exaggerating somewhat to make my point, but I don't think I am off the mark that much. Lower CAP Rates means lower net cash, and when you compare it to the higher purchase price, down payment has to be increased accordingly.
For a thorough discussion of this point and the Ten Secrets your lender does not want you to know email me about our Special Report; GET Your Loan Closed! with over 95 pages which is now available.
I found a Lender that wants to lend, they will lend on any commercial property with normal underwriting guidelines as long as there is cash flow. Almost sounds like the way it used to be. They are even closing loans regularly the BDO told me.
So what's the catch I asked Him. How can you ignore what everyone else is "hung up" on and still be closing loans regularly.
Here's his answer as long as the client will deposit 20% of the loan amount in our bank we will approve their loan subject to normal underwriting requirements.
Here's a thought...If the client has an additional 20% to be put in the bank over and beyond their down payment do you think they really need a loan? That probably means in terms of a straight commercial loan 60 to 70% down including the extra CD at the bank, with CAP rates as low as they are. I might be exaggerating somewhat to make my point, but I don't think I am off the mark that much. Lower CAP Rates means lower net cash, and when you compare it to the higher purchase price, down payment has to be increased accordingly.
For a thorough discussion of this point and the Ten Secrets your lender does not want you to know email me about our Special Report; GET Your Loan Closed! with over 95 pages which is now available.
Monday, October 20, 2008
Daily Observations - The Times They're Changing (Again)
Another interesting side note, as we go further and further down the road of tightening credit.
Tonight I was told by a very good lender that we have done a lot of deals that no longer will a property owner be able to refi a property and pull equity out unless they have owned the property for over two years. Yes you heard me correctly two years.
Gone are six months, and then a refi. Lenders want to know what someone paid for the property and that is still going to be the value unless they have done a great deal of changes to the property to help increase the income. But wait...
The increased income has to be stabilized for at least three years before they can count the new source of income. So PGI (Potential Gross Income) will not be taken into consideration anymore.
Oh wait, there 's still more. The lenders do not want to repay anyone for improvements that they made to the property even when it results in increased income.
So if I sound a little bit sarcastic tonight I'm not, I just want to report exactly what is occurring out there so clients and friends know exactly what is going on.
Yes we still can do loans, There are boutique local lenders that we can still entice with good deals. For more on this visit loanforbiz.
Tonight I was told by a very good lender that we have done a lot of deals that no longer will a property owner be able to refi a property and pull equity out unless they have owned the property for over two years. Yes you heard me correctly two years.
Gone are six months, and then a refi. Lenders want to know what someone paid for the property and that is still going to be the value unless they have done a great deal of changes to the property to help increase the income. But wait...
The increased income has to be stabilized for at least three years before they can count the new source of income. So PGI (Potential Gross Income) will not be taken into consideration anymore.
Oh wait, there 's still more. The lenders do not want to repay anyone for improvements that they made to the property even when it results in increased income.
So if I sound a little bit sarcastic tonight I'm not, I just want to report exactly what is occurring out there so clients and friends know exactly what is going on.
Yes we still can do loans, There are boutique local lenders that we can still entice with good deals. For more on this visit loanforbiz.
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