In the aftermath of the recent banking turmoil, banks are becoming increasingly cautious when it comes to real estate lending. To get a sense of the scale of the pull back, consider this finding from the Washington Post:
“Recent data from the Federal Reserve shows that commercial bank lending fell by over $100 billion in the two weeks ending March 29. That is the largest two-week cutback in overall bank lending, in dollar terms, in records going back half a century.”
The Federal Reserve’s latest loan officer survey reported, “For construction and land development loans, major net shares of banks widened the spread on loan rates, lowered loan-to-value ratios, and increased debt service coverage ratios; significant shares of banks decreased maximum loan size and market areas covered.” The tightening is expected to continue for at least the rest of the year.
With conventional banks pulling back on real estate investment financing, Anchor Loans is actively reaching out to experienced investors, many of whom are worried that their long-time bank lenders may leave them at the altar. “Regional and community banks are under a great deal of pressure from regulators to increase liquidity and reduce assets on their balance sheets,” said Brad Chmura, Anchor's Chief Revenue Officer. “For regional bank customers this means credit is getting tighter, LTVs are getting lower and deals are getting harder to finance. Fortunately there continues to be an ample supply of capital in the private lending sector and a strong appetite for real estate projects,” said Chmura.
In addition to dependable capital, bank clients will likely appreciate the customer experience difference that companies like Anchor deliver. Bank customers who are accustomed to slow decisions on loans or waiting two weeks for a holdback draw, will be pleased with the streamlined application, fast funding turn times and speedy draw process that private direct lenders can provide.