How Will a Struggling Real Estate Lending Industry Affect Market Lenders?
Recent statistics show a slowdown in residential real estate lending, with some reports indicating that lending dropped as much as seven percent from 2015-2016. Commercial real estate lending is down even more, declining by roughly 10 percent in that same period. With the trend set to continue in 2017, investors are wondering if they’ll be able to get a commercial property loan. Bank lenders have taken a big hit, but you may be surprised at the benefits market lenders have enjoyed as a result.
Market Lenders Have Fewer Regulations
Since private commercial lenders have fewer regulations to follow than traditional banks, they have the ability to meet the demand for any commercial property loan. Banks can only offer a certain interest rate to investors, which is typically higher than you can get with hard money lenders. As a result, statistics show market lenders have enjoyed a 700 percent growth in the industry over a span of about four years. With that trend not showing any signs of slowing in the near future, market lenders are destined to grow even more.
Market Lenders Will Gain Market Share
Private commercial lenders have more accessible underwriting than large banks, which is another reason why growth is projected to continue over the next several years. As is the case with almost any industry, there is usually always one sector that benefits from a decline. When it comes to commercial real estate, private commercial lenders have a clear advantage during this decline and, as a result, can grab market share.
Investors Can Get More From Market Lenders
Market lenders can offer investors a commercial property loan that traditional lenders simply can’t. For example, when an investor wants to finance a short-term deal that falls out of the underwriting criteria of a traditional bank. There are many other reasons why banks can’t offer the types of loans investors need, so market lenders are becoming a more popular alternative.
Commercial Mortgage Connection offers many different options to help you secure the commercial property loan that’s best for you. Be sure to contact us to learn more about how we can help.