East Coast Commercial Finance

As you should know, the major financial collapse of 2008 has had a major negative impact on the banking industry around the world. This has had an effect on commercial real estate too.

Commercial real estate lending has not only suffered because of a dramatic slowdown in activity, but it has also suffered because banks who are fighting for their lives have tightened the strings considerably.

Over the decades big banks have considered commercial finance one of their most profitable areas. The reason is fairly obvious: larger commercial projects are considered more reliable, are evaluated more rigorously, and risks are more easily quantified than is the case with smaller projects.

Near the beginning of the downturn in the domestic real estate market in 2008, commercial real estate projects continued to find favor with the big banks. Commercial real estate loans were considered a safer investment for companies with large capital reserves. As a result the commercial market continued to grow even as single family homes sales were plummeting.

But the events of 2008, and the major adjustments that most big banks are having to make just to stay afloat are having an significant impact on commercial lending.

Big banks with significant exposure to real estate markets are pruning marginal accounts in an attempt to limit their exposure to the sector as a whole. Whether this makes sense of not, it is typically what big banks do. In many cases whether a commercial deal looks good or not it will not go ahead with a large bank because they have decided their exposure in that sector is already too high.

This creates opportunities for small banks, lending institutions and commercial real estate mortgage brokers with connections to alternative sources of funding. These smaller lenders are not overexposed to the commercial real estate market, and are often willing to consider good deals that the large banks no longer find attractive.

For commercial lending and commercial mortgages, East Coast Commercial Finance offers an alternative to large banks. Usually when it comes to commercial funding for projects such as retail developments, comdominiums, resorts, mall projects, many lenders feel their only option is to borrow from a large bank.

In order to understand the concepts behind commercial real estate loans, first examine the difference between commercial financing and residential financing. Residential loans are applicable for single families, whereas commercial loans apply to larger groups, such as a corporate office building or a large condominium compound. Most residential loans are given at a maximum of several hundred thousand dollars; commercial real estate loans are much higher, sometimes reaching millions or billions of dollars.

The fact that commercial lending involves such large amounts of money means that many small lending companies cannot compete with the large banks. But a well-placed lender such as East Coast Commercial Finance not only provides alternative lending sources unavailable from large banks, but also offers levels of service and flexibility that you cannot get elsewhere.