Criteria

Collateral:

Improved real estate.  The critical component here is; should the loan default, how difficult will it be for us to liquidate the collateral?  For example, the market for a $500,000 single family residence is significantly greater than for a $2 million helipad.

LTV:

Typically 60% to 80% depending on a number of factors such as the marketability of the property, is it an income producing property, how strong are the borrowers, etc...

Credit:

As with most lenders, we look for good credit.  However, we are not hung up on scores per se.  So a few lates or other minor blemishes won’t disqualify a borrower.  If a borrower is currently delinquent, we won’t approve the loan.  Simply stated, if a borrower is not paying their bills now, they probably won’t pay us either.

Tax Returns:

Yes, we do need them.  We don’t use them to calculate ratios, but we do want to make sure that our borrower is in compliance with tax laws, see what tax liabilities they may have, and obtain a general sense of their business acumen.

Appraisal:

Perhaps; it depends on the type of property and the loan amount.  A benefit to our borrower is that we can close on a verbal indication of value and receive the completed appraisal report after closing.  This can save considerable time.

Cash Flow:

On most loans, we do require monthly interest payments, therefore, the borrower needs to demonstrate their ability to make such payments.  In some cases, if the borrower is exceptionally strong, we may consider an interest reserve.

Character:

This is most important to us, as we hope to build a long term relationship with our borrowers.  Typically, if we are interested in the loan, we invite the borrower to our office to introduce themselves and discuss the project.  If we decide to move forward after this initial meeting, we will meet the borrower at the project site to inspect the property and finalize the details of our financing.  After that, we can generally close in ten days or less.