Evaluating Today’s Financing Options
Lending Options in Today’s Market
Chris ChristiansenSenior Vice President – Bank of America Merrill Lynch
Global Commercial BankSalt Lake City, UT 84111
•Life Companies•Bank Financing•Hard Money
•Friends & Family
Real Estate Financing Options:
Where does your property and / or borrower fit?
Bucket #1Owner Occupied Properties
Typically funded by banks looking for a broader relationship
• Multi-purpose• Special Use
Bucket #2Non-Owner Occupied (Investor Properties)
Transactional relationship
• Single Tenant • Multi-Tenant
• Mixed Use vs. Single Use
Bank Financing Consists of 2Buckets:
What’s Important to a lender:1. Property type2. Strength of the borrower3. Deal size
A CRE Broker can add tremendous value by positioning the appropriate lender
Loan Type Conventional Real Estate Loan SBA 504 Real Estate Loan
Loan Size $250,000 – $15,000,000 $350,000-$13,750,000 (1) total project costs
Use of Proceeds
Refinance, purchase and/or improvement of OOCRE • Build, purchase or improve (OOCRE) • Refinance of existing SBA 504 first deed of trust • Equipment with usable life in excess of 10 years (e.g.,
printing press)
Construction Yes Yes
Management Experience
Prior industry management and ownership experience preferred
Prior industry management and ownership experience preferred
Down Payment
20% 10-20% depending on property
Amortization OOCRE 15, 20 or 25 years OOCRE up to 25 years
Term 5, 7, 10, 15 or 20 years Up to 20 years
Fees Negotiable Many eligible to be financed
Rates Contact your Bank of America Merrill Lynch client manager or business development officer
Contact your Bank of America Merrill Lynch client manager or business development officer
Prepayment Fees
May be applicable under certain fixed-rate options May be applicable under certain fixed-rate options
Sweet Spot: Owner Occupied Properties
Whether it’s pursuing co-marketing opportunities or developing quick, innovative financing solutions for your clients, you can depend on Bank of America Merrill Lynch to achieve your goals.
Know your lender:•What is their sweet spot?•Deal size constraints / parameters?• Property type constraints •Concentrations?•Are they partial to certain industries?
Bank of America Merrill Lynch•Owner Occupied / Investor Properties on a case by case basis•Single resource for SBA or Conventional financing for $250K to $15MM• Prefer multi-use but will finance some special-use properties •Industries: Manufacturing, Healthcare, Distribution, Professional Services
Lending Options in Today’s Market
Chris ChristiansenSenior Vice President – Bank of America Merrill Lynch
Global Commercial BankSalt Lake City, UT 84111
Thank you
A Community Banker’s View on Lending
Maryann Mize, CCIMCharlotte State Bank & Trust
Community Banks less than $10B represent
90%
84:1
85:1
86:1
87:1
88:1
89:1
90:1
91:1
92:1
93:1
94:1
95:1
96:1
97:1
98:1
99:1
00:1
01:1
02:1
03:1
04:1
05:1
06:1
07:1
08:1
09:1
10:1
11:1
12:1
13:1
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Assets > $10 Billion
Assets $1 Billion - $10 Billion
Assets $100 Million - $1 Billion
Assets < $100 Million
Commercial Real Estate Loans as a Percent of Total Assets
CRE Historic Basis:
Communty Banks
have had a role
Source: fdic.gov
84:1
85:1
86:1
87:1
88:1
89:1
90:1
91:1
92:1
93:1
94:1
95:1
96:1
97:1
98:1
99:1
00:1
01:1
02:1
03:1
04:1
05:1
06:1
07:1
08:1
09:1
10:1
11:1
12:1
13:1
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Assets > $10 Billion
Assets $1 Billion - $10 Billion
Assets $100 Million - $1 Billion
Assets < $100 Million
Noncurrent Assets Plus Other Real Estate Owned to Total Assets
CRE Troubled
Assets Overall
is declining
Source: fdic.gov
Overall: low Loan To
Deposit Ratio’s means
money to lend,
including CRE
CRE Lending
Overall is up since
2010
A Community Banker’s View on Lending
Maryann Mize, CCIMCharlotte State Bank & Trust
Questions?
Evaluating Today’s Financing Options
Thank you!
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