Going to the bank for a commercial loan

I have not done a project since 2008 when I got sick. I have a commercial project which will require a loan to get surveying, engineering, dirt work, brush hogging, electric infrastructure, sewer and plumbing connections, buildings, and road construction. I doubt I will get 25% of what we request. We may even be denied because it will take over a year and ..........well you know the rest of the story. This business will have six figure profit, but will take a six figure loan to finalize the project. I will keep the project silent, but the point is with banks too big to fail, the local community banks have been handcuffed with regulatory lending rules and there are thousands of small businesses who have less than a year payback on loans, and the loans cannot be made. I expect the worse, and will meet with the banker with drawings, specs, and concept plan with bills of material. In any case I will proceed so far with my own capital can stretch, but that is no way to do business.

There can be no full recovery until commercial banks return to a loan officer having discretion to make $200,000.00 loans without government scrutiny. It should take a loan officer one week to present a loan package to the board for approval or rejection, but the regulators kill the loan officer with regulatory red tape and delay. I am hearing six months on loans which used to take thirty days. We need substantive issue discussions on the roles of community banks in America and the role of the too big to fail banks.

2seaoat wrote:There can be no full recovery until commercial banks return to a loan officer having discretion to make $200,000.00 loans without government scrutiny.  It should take a loan officer one week to present a loan package to the board for approval or rejection, but the regulators kill the loan officer with regulatory red tape and delay.  I am hearing six months on loans which used to take thirty days.   We need substantive issue discussions on the roles of community banks in America and the role of the too big to fail banks.

Not a prayer of a loan officer approving a loan without oversight. In the day...the loan officer, depending on their status in the institution, could make the decision. More iffy loans went up to the loan committee.

Now that all loans are usually bought by Fannie or Freddie, there is automatic government oversight. Appraisers are also faced with additional regulations.

A few months back I listed a several leased warehouses for sale along with an acre and a half of Industrial zoned land. The buyer brought in an acceptable offer through another REALTOR I know well. I also knew the buyer well but had never done any real estate business with him.

The difficulties came about because the buyer and tenants got together and told the buyer one thing. The sellers inherited the property from their father and knew nothing about it and had no current leases.

The lender, and loan officer, known to all of us was ready to close in about three weeks. It took another couple of weeks because of the lack of information and the buyer and tenants getting together.

Buyer is a hardcore biker and one my Ol' Man had known many years ago. As we got on the elevator he stood along side of me and said..."I know, it would have closed easier had I stayed away from the tenants". We all had a good laugh.

by 2seaoat Today at 6:21 am
There can be no full recovery until commercial banks return to a loan officer having discretion to make $200,000.00 loans without government scrutiny. It should take a loan officer one week to present a loan package to the board for approval or rejection, but the regulators kill the loan officer with regulatory red tape and delay. I am hearing six months on loans which used to take thirty days. We need substantive issue discussions on the roles of community banks in America and the role of the too big to fail banks.-----

You can thank Obama

Keep in mind that the two architects of the mortgage/housing/financial meltdown, Chris Dodd and Barney Frank are the very people who, as lame ducks were appointed to head the committee charged with FIXING he FIASCO.

Talk about hiring the fox to repair the hole in the chicken coop!

Dropped off the drawings and pro forma, and do not expect anything good to follow. We used to have local banks and local boards of directors. We have big national banks invading communities. I like the idea of strong community banks with local boards and a strong secondary market to buy the loans....the big boyz are squeezing small banks.

That's happening throughout the economy. Small biz being bought/driven out via govt policy. See obamacaid.

I was extremely lucky to sell in 2009... even though I hadn't reached my goal for the biz.