Bank Loan  Turndowns:

In commercial real estate, many times we all encounter client situations where clients have less than excellent credit.  And these credit challenges can kill opportunities.  This week I want to focus on Bank Turndowns.  To keep this simple, just call me when this occurs.  We have many different lenders for these challenges.

Here are a few scenarios that are fairly common:

• SBA Loans with hair – Did you know that clients can still get an SBA loan even if they have had a foreclosure, loan modification, or even some legal issues?  The major banks do not want this business, but there are lending avenues available regardless.
• Unstabilized Investment Real Estate – When a property has been purchased and needs to be cleaned up prior to being leased out, this causes the typical bank to shy away from doing the loan.  Normally, private money is utilized to bridge the gap.  We have solutions which do not require the use of private money.
• Debt Service Ratios under 1.25 – Once more, most banks require that the investment property has enough cash flow to cover the property’s debt at a ratio of 1.25 to 1.  Often investors cannot get a loan when the ratio drops below this ratio.  There are solutions which allow the use of other investment properties’ cash flow to offset the shortfall.

I want to keep this short this week.  The bottom line is that there are solutions if a deal makes sense.  Just give me a call as situations arise that seem challenging.  As always, feel free to call me with any of your strategic financing needs.