Alternative Lending Sources

The current economic landscape has elicited newfound interest in the commercial lending space. Industry stalwarts like the life insurance companies, cmbs, and banks have stepped up their efforts and allocations, while lesser known alternative players have actively moved into real estate lending over the past year. Credit unions are a good example of this trend, carving out their own niche in the commercial lending space.

The unique loan packages they offer target a specific kind of borrower. One of the ways these institutions stand out is by offering no prepayment penalties, giving added flexibility to property owners who may want to sell. Fixed rates are competitive with other lending segments, processing costs are lower, and legal costs are often eliminated with standardized documentation. These are portfolio lenders, so loans are tailored to borrowers’ needs and local marketplaces.