Looks like lending is slowing


#1

Anyone else noticing lending for smaller parks is slowing on loans less than $1M. Recently went out and got terms on a couple of different parks and looks like banks are starting to get very selective and/or terms are awful.


#2

Same here, in a specific market best I could do was a 3 year balloon @ 5% interest on 20 year amortization. They are waiting to see how much rates go up…


#3

In my region we are getting 5 yr terms only, and the amort is 15-20 yrs. These are small/local lenders though, not sure about the 1mm+ lenders.
Certainly impacts the cash flow with a 15 yr amortization on a small park


#5

My Two Cents:
The above $1MM market has not changed other than rates are rising like they are for all other products. You can still get 30 year amortizations and a ton of term options 5,7,10,12,15,20, all without recourse. On the small loan front what you need to realize is that “banks” in general do not like to do transactional business. What is transactional business? It is simply making you a loan without selling any other products (deposit accounts, personal accounts, merchant services…). Unfortunately for everyone involved it is just as time consuming to do a $300K loan as it is a $1MM loan, and the fees don’t justify the work. So if I remove the income producing upsales of customer lending, and am looking at a purely transactional loan it is hard for a bank to justify doing a small loan. For this reason most banks steer away from small balance MHP loans. The typical small loan MHP client does not represent a large opportunity for upsale products and more likely than not is not a resident of where the park is located. Likely the client lives hours away to State away from the park so how could a small local bank expect to get deposit accounts etc. out of the deal. Sorry for the lengthy response, but hopefully if will give you another way to look at small deal size.


#6

Damn, this is well-put. Thanks for contributing.


#7

Try a local credit union that does commercial loans. I recently did a cash out refi on my park with very favorable terms. Shopped it with about 7 other local banks and the credit union had much better terms.