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Thursday, May 15, 2008

Daily Observation - Lenders are REALLY Tightening Up

Be prepared to buckle down and find the cream of the crop for deals to be approved. No more 75% secured collateral, every lender I speak to wants 90% or better secured.

Don't let this scare you, but also don't waste your time on deals that will never close.

There is still a plethora of deals that can and will close. We will have three closings by the end of this month.

Because collateral is so important to the deals going forward today I am sharing a spreadsheet that looks at what collateral is worth in the eyes of the bank, not in the eyes of the client. After reviewing this you will see why I recommend to go after manufacturing as a GREAT source of business.

Collateral Type Factor
Borrower Occupied Residential 80%
Rental Residential/Apartments 80%
Conforming Commercial (Multi-use) 80%
Non-conforming Commercial (Multi-use) 80%
Non-conforming Commercial (Single-use) 80%
Vacation Home 80%
Undeveloped Land 50%
New Equipment Up to 50%
Used Equipment, A/R, Inventory, etc. Up to 20%

For more on Business loans and their requirements visit Business Loans

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