Commercial Lending

Commercial lending will never go away and despite rumors that the United States economy is entering a dark depression, there will always be a need for commercial loans. Like Hard Money loans, they may fall out of favor temporarily, but the banking relationship will always be the cornerstone of investors worldwide. Lending money is here to stay. Always will be an important piece of the investment puzzle.

The reason for this is obvious. Banks need investors just as investors need cash like a baby needs milk. Let’s look at the relationship and you’ll see that Banks exist to loan money.

Until recently, the basis for all banking was for the purpose of generating income through interest rates and fees associated with lending. Commercial loans normally carry heavy upfront fees, which banks refer to as origination fees. Though viewed as extortion by investors, they pay up because they need money and few places exist to fund their deals.

From an investors standpoint, the ability to leverage huge debt through the ownership of real estate excites the fancy of all investors. As properties appreciate and tenants pay rent, owners are able to legitimately deduct fees, interest payments as well as deprecation from their tax return. This, real estate ownership, is the only game left for cash flow and sizable gains.

The current problem with banking is their unwillingness to lend due to catastrophic losses. This has clamped tight the investors ability to buy and as banks look to depositor relationships for income, real estate moguls have to find new sources for money. Never has a Commercial Loan Broker been so important. With relationships across the wide spectrum of lenders, a qualified broker will have solutions when you need money. Call us to discuss your real estate needs.