Ask the Small Business Lending Expert: Banks & Commercial Real Estate
As a small business lending expert I get asked questions all the time about the current banking situation. One of the most frequent I have heard is:
Q. Are banks ready to start lending to commercial real estate again?
A. From my experience what I can share with you is this. I think the banks are not out of trouble yet. I don't see the banks getting more robust in their lending. They are distracted with their own problems, as indicated by the news articles we are seeing regarding China's interest in the U.S. banks and the European financial crisis and it's effect on our economic expansion. To solely rely on the banks for lending is not a prudent direction for small businesses. However, private investors are forming groups to do Real Estate deals outside the banks with more competitive rates. Essentially, private lenders are coming in to fill the vacuum created by the stagnant bank loans.
For instance US Capital Partners, as a private investment bank and direct lender is able to fill the gap and expand private lending. We make all manner of loans even Real Estate loans at competitive rates. This is a new paradigm shift; a global village of lending. For political and economic reasons private banks are here to stay and will be expanding their private lending. The banks are unable to do big institutional deals anymore. However small businesses need to grow regardless of the financial bubble burst of the large banks. We can't rely on European banks to solve our financial needs and the China West balance sheet exposes us to sovereign debt. For the health and prosperity of the future, small businesses and commercial real estate companies will be wise to turn to direct lending and advisory experts.