SBA and Commercial Finance and Investment News

Welcome!

Centennial Lending, whom I represent as senior Business Development Officer, is a credit union service organization owned by 13 credit unions in Colorado and Wyoming.  We lend in Colorado, Wyoming and Nebraska and finance” small” projects from as little as $100,000 up to $5 MM.  We like small retail centers, freestanding retail, office, industrial and retail condominiums, neighborhood centers, office buildings, industrial buildings and of course apartments from 5 to 100 units.   We also finance 1-4 unit rental housing.  We offer a 5+5 fixed rate and a 10 year fixed rate permanent loan, with no prepay penalty.  And construction financing for qualified projects. We also are experts on the SBA 504 and have financing up to 90% LTV for owner-user buildings.

Please click here to download our most recent rate sheet for commercial and multifamily construction and permanent financing:

Rate and Program Summary Centennial Lending Commercial Mortgages January 2012

And here are some of our recent closings

Success Stories by Centennial Lending

Contact Tim Thomas for more information, tim.thomas@centennial-lending.com, 303-746-9169

Yes, I write TWO blogs:  this one at www.sbafinancenews.com and www.coloradoloaninfo.com.

Capmark, once GMAC, was one of the lead players in CRE finance — especially the big glam deals — in this Country.  It looks like, as the WSJ reports, they are headed for bankruptcy as early as Monday.  So sad for a long established and well respected shop that did almost $10 B in volume in its heyday.  There may be a servicing sale to Warren Buffet and partners, but Capmark-GMAC as we know it is done.

Capmark had a $1.6 billion second-quarter loss and warned it might be forced to seek Chapter 11 bankruptcy protection. KKR has already written down its investment in Capmark to zero.

On the more uplifting SBA side,  despite the pronouncements from the White House, remember CONGRESS has to raise the 7A limits — wow, what a lift that will be — $2MM to $5 MM   Let’s hear it for Sen. Olympia Snowe, whose bill does just that! 

NAGGL is in Phoenix this week — watch the news!  Small business is of course not covered like Balloon Boy, or Balloon Parents, or Balloon Household Living Conditions, or Balloon Dad Goes to Prison —  or flu vaccine shortages, but there is a little press for us and more than a little good news.

AND remember htere’s a new national wholesale player looking for a few, good correspondents:  www.horizon-west.com.  Contact tim@horizon-west.com.  Got gas?  Contact Dominick  dominick@cpcommerciallending.com.

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Finally, insiders tell us, there’s some movement afoot in the 504 market.  IN THE NEXT 30 DAYS.  Yup! Don’t be surprised if the market starts moving next quarter.   Why?  Small business creates 60 to 80% of the new jobs in this country.  And driving all the doom and gloom in commercial real estate – retail, office, industrial, and even apartments —  is unemployment.  You can throw all the money out of the helicopter you want, but for growth, grow jobs.  To grow jobs, grow small business.  And to do that, give small business the credit it needs. And don’t blame the poor credit guys at the bank.  I wouldn’t sign on a startup business loan to save my soul – default rates are high and the Executive Committee – and my friendly assigned bank examiner – will see whose signature was on the approval and find a reason to second guess me.  No, you need a government guarantee to prime the pump.  Credit officers will not do it.

The TARP program was a FLOP when it comes to SBA. F. L. O. P.   Why?  Not one darn loan has been bought since March.  And why?  Because if you participate in TARP, Uncle Sam gets a warrant to buy your common stock (read – government ownership of bank) and there’s that executive compensation control issue (read government control of bank) So no takers, no surprise, lots of talk, and enough hot air to launch a hundred balloons, WITH kids, out of Fort Collins.

But stay tuned.  Change is coming.  It’s time for a change.  Gee, whose campaign rhetoric was that?    Give us 30 days, and then roll tide!

PS, there’s a new WHOLESALE SBA CORRESPONDENT PROGRAM just launched.  Check it out:  www.horizon-west.com.   And contact the undersigned, timothyethomas@gmail.com, I know all the right people.  OK, I admit it; I’m one of the founding fathers along with Keldon Moldre, credit guru from Bank of the West, and Jason Charles, resident authority on all things 504.  EXPERIENCED commercial mortgage bankers and community banks will be interested in joining the Horizon Network, that’s for sure!   And I hear they pay PREMIUMS on good quality CRE secured deals and they pay both on 7A and 504!  And it’ NEW money not that same drill from the big bank in Salt Lake.  Membership in the “network” is going to be limited to about a dozen companies, and there’s an application process.   The honor of being among the first aboard this new conduit belongs to Dom Scorzo, Dan Alms and Mike Boraca of Commercial Partners of Illinois, www.cpcommerciallending.com.  I understand Fred Barrow, former SVP of IMPAC, is joining the Commercial Partners team as well as a correspondent director.   You can reach Fred at fred.barrow@comcast.net.

Once upon a time, a successful small balance commercial mortgage broker became more
successful despite the worst recession in 50 years. He realized that the only liquidity in the CRE
market, for a while, was in the SBA sponsored loan production area because SBA secondary
would come back first – it was one of the government’s key areas of economic stimulus. And with reduced fees and higher guarantees, that expansion was well underway!
.He further understood that he needed a good strong 7(A) program for refinances, and some
purchases, and a competitive 504 program for purchases. Some lenders paid up to 1.5
points back on 7(A) loans and up to 2 points on 504 loans, and those lenders were his main investors.
The Bank that paid that premium was tough on credit and cash flow – so some loans did not fly – but they could tell him up front, and all he needed to get was three years tax returns, current P&LS, operating company P&L
and balance and returns, and they would do the work and screen. And our Broker studied their
policies, and what industries they liked and did not like, and how they came up with global cash
flow. So the surprises got fewer and fewer.
Besides, the Bank was a preferred, basically delegated, lender. PLP. The files were not
delayed by the SBA. Yes the 504’s took longer, but the 7A’s flew. And on the 504’s, And the Bank he chose
made the bridge loan – no fee to them – so there was no waiting for the 504 debentures to
sell. Purchases closed on time.
He was also afraid of PROCESSING SBA loans – so he hired a top notch outside packager with
17 years experience. See http://www.sbaonesource.com. The borrower paid the fee once they had accepted the pricing. It was great. No overhead, vast expertise, and top quality files with all he
forms filled out just the way their SBA banker– or any other lender – or auditor – or the SBA –
would want.
Now all our Broker needed was business. So he devised a spreadsheet, that gave a potential buyer two or three alternatives (contact timothyethomas@gmail.com for a copy of the magic spreadsheet) and plugged
in the rates. He hired a commissioned LO to pull up listings on CoStar and Loop Net of owner
user properties and office condos for sale. He targeted the industries the Bank wanted to
see. And he pulled the listing, plugged in the numbers, sent that fantastic spreadsheet to the
commercial realtor who had the listing. And he did TEN of these a day. And he followed up by
phone. And each day ONE of them called back. And each week THREE of them had customers
wanting to be pre-qualified. And of those three, one closed, So he had 52 closings, average loan
a paltry $500,000, that’s $26 million in volume, average fee 1.5 points, salesman made
$195,000, and our Broker made $195,000, plus a hundred percent, less overhead, on his own
production. So he expanded, and narrowed his focus while widening his base. After all, there
were a million properties listed in the right size range and SOMEONE had to finance them.
Over time, his business grew by referral, too, and some select calls to businesses in those key
industries that everybody liked.
And life was good again.