We are all concerned about better understanding what the options for commercial financing in 2011 are. From what I have seen it does not appear that 2011 will be a much better year in commercial financing than 2010. Here are some of the reasons why 2011 will not be easy:
- There is limited capital available in the market and people who have capital are primarily buying properties
- Interest rates are starting to go up, making it more difficult to qualify for financing
- Values are going to still be low
- Limited economic recovery
- Banks and Financial institutions have not yet cleared their books of bad debts
- Higher rate of foreclosure in the residential market, while different than commercial, influence how and if banks can make loans
To be successful in getting financing in 2011 will require:
- Good understanding of banks and financial institutions requirements
- Time as it takes times to get a loan approved and financed
- Flexibility in working with capital sources
- Properly manage clients expectations
While it is not going to be easy, it will be possible to get it done. All parties involved have to be flexible in their approach, whiling to adapt to the circumstances and understand that it will be an involved process.
