© 2012 Stringham Schools

COMMERCIAL REAL ESTATE FINANCING

I. COMMERCIAL REAL ESTATE LENDERS

To include a discussion regarding the various sources of financing, the benefits,

disadvantages, general conditions of use and cost associated with each alternative.

1. Commercial Banks

2. Mortgage Brokers

3. Mortgage Bankers

4. Insurance Companies

5. Sellers

6. Private Investors

II. TYPES OF COMMERCIAL REAL ESTATE LOANS

This segment will address the different type commercial property lending

alternatives and the unique structures associated with each and the difference in

pricing.

1. Raw Land

2. Acquisition & Development

3. Construction

4. Permanent

III. BORROWER CONCERNS AND ISSUES

In this session we will address the process required to develop a loan request

package that adequately addresses the various issues of concern to the lender;

including risk, risk mitigation, strength of the borrower and the project.

1. Borrower Entity

2. Principal(s)

3. Risk Mitigation

4. Financial Information

5. Business Plan

IV. UNDERWRITING POLICIES & PROCEDURES

This session will address those risk assessment and credit underwriting criteria,

which enables the lender to evaluate the borrower and the probability of default

associated with the transaction.

1. Loan amount by property type

2. Loan terms

3. Pricing structure

4. LTV by property type

5. Feasibility study

6. Minimum requirement for borrowers initial investment

7. Minimum standard for borrowers net worth, cash flow & debt coverage ratio

© 2012 Stringham Schools

V. PROPERTY CONCERNS AND ISSUES

To include a review of the different characteristics’ of commercial real estate and

how these differences impact the lenders perception of risk the availability of

financing.

1. Location

2. Size

3. Features

4. Prior use

5. Intended use

6. Cost

7. Value

8. Surrounding area

VI. GOVERNMENT PROGRAMS

To include a brief discussion of the various government credit enhancement

programs to include a review of the cost and benefits of each program.

1. Industrial Development Bonds-IDA

2. United States Small Business Administration-SBA

3. Rural Development Agency-USDA