For some time I wrote about the last “change” in the commercial lending business. “La Petite trade Lender” These guys are rewriting the rules on commercial loans of less. Million, although it would not burden your business right away if you do with larger objects, it is with you because they do something else end:

Stated income loans or EZ Document

Commercial loans, excluding loans from private money, was purely a “comprehensive proposal document” subscription. This means that the borrower must have a mountain of paperwork submitted, including statements of income tax returns of companies and the financial statements in addition to documents related to property such as leases, rent roll and income and expense history. And in the end, the lender on the loan is completely secure cash flows of the property, regardless of the borrower’s income, anyway!

These new lenders are willing to take into account the movements of the borrower’s available cash on a specific and their purchasing decision based on the creditworthiness of the borrower’s cash flow property, and cash reserves of the borrower. This is unprecedented in commercial loans and forces to offer most conventional lenders competing programs in the near future, or they lose lending.

Another consideration is that investors who buy the loans will probably increase their loan amounts in the future if they have a good experience with small loans. Why would not they? It is as expensive to purchase and finance a loan of dollars, because he is a 0K, but the yield is 10 times more. This brings even more pressure on the traditional lenders to create a kind of competitive program and sell their own programs of the same investors.

So my personal view of the situation is that there are significant changes in the credit market when the small balance commercial lender has a winning formula. They are too new to have any real experience in a falling market and I am sure that traditional lenders will look closely at them.


Commercial loans