l Loans Are Disappearing Rapidly. Keeping Savvy with commercial loan lenders in this market place.
Even Small and Regional Commercial Banks Have Cut Back Sharply on Commercial Loans Lending
In these times its important to get your fingers on the pulse of the commercial real estate lending market. The CMBS lenders started to die late last year and now they are not lending at all.
Most of the mega commercial bank lenders got crushed in the subprime residential lending debacle. Their balance sheets are so underwater that they are making at most 2% of their 2007 volume of commercial loans. Essentially the mega-banks are out of the commercial loans lending market.
Until very recently, however, the smaller banks were still making some commercial loans. We were greatly disturbed last week, however, when several smaller commercial banks - lenders with no exposure to the subprime crisis - contacted us and confided that their balance sheets were so troubled that they too had stopped making any commercial loans.
We are pretty sure that this is a trend that will continue among the surviving small and regional commercial banks. As their commercial loans to local industrial companies start to go bad (sales of widgets and other industrial products are cratering), soon most commercial banks will stop making commercial loans completely - even permanent loans on standing commercial properties.
Many people are thinking that this is the last call for commercial loans from banks. If you don\’t close your loans in the next 90 to 120 days, you may have to wait five to ten years before commercial loans with decent interest rates reappear.
There is some truth in the idea that even the small bank commercial lending is going to dry up, although there will still be a handful of very savvy commercial loan lenders who can broker deals even in times of severe financial crisis. The key to success the current commercial loan climate will be finding the elite few lenders who are capable, and relying on them to broker your loans.
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