AN UNCONVENTIONAL FUNDING SOURCE FOR DECLINED LOANS

Many banks refer their declined loans to A10 Capital for non-conventional financing on tough commercial real estate transactions. A10 helps bridge special situations and/or transitional properties that don't meet the bank's underwriting criteria or regulatory requirements – such as lease ups, tight closing deadlines, construction takeouts, rehabilitations, or foreclosure purchases. When circumstances have settled and the property has been repositioned or stabilized, we refer the loan back to the bank for conventional financing.

We recommend referring declined loans to A10 Capital for unconventional financing in the following scenarios:

REPOSITIONINGS / TRANSITIONAL PROPERTIES

  • "Lease-ups" (provides time to get the property occupied)
  • Rehabilitations
  • Insufficient cash flow generated by property (0.40 to 1.15:1 DSCR)
  • Sponsor cash flow or net worth constraints
  • Foreclosure purchases
  • Real Estate Owned (REO) purchases
  • Cash-out financing

TAKEOUT FOR TROUBLED MATURING LOANS

  • Matured or about to mature
  • Special Mention or Sub-Standard rated loans
  • DSCR below typical bank requirements (between 0.40:1 and 1.15:1)
  • Lender fatigue has set in - multiple extensions granted
  • Commercial construction takeouts – when a newly constructed commercial property is not leasing up as quickly as expected
  • "Orphan Loans" picked up from a prior bank acquisition that are either criticized, classified, or don't fit into the portfolio strategy

OUR UNCONVENTIONAL LOAN PARAMETERS

  • Loan Types: “Nearly Bankable”, Bridge, Mini Perms, and Note Purchase Financing
  • Asset based underwriting (DSCR can be below 1.15:1)
  • 1-5 year terms (preferred term is 2-3 years)
  • Up to 70% LTV (average is about 60%-65%)
  • $500,000 to $10 million individual loan sizes
  • Secured by commercial real estate

BENEFITS OF USING A NON-CONVENTIONAL FUNDING SOURCE

  • Allows bankers to provide creative financial solutions to bridge unusual/tough situations, even when the loan is declined by the bank.
  • A10 Capital is not a bank and will not compete for other business you have with your customer.
  • Once the situation settles or the property stabilizes, A10 Capital prefers to refer the loan back to you for conventional financing. Accordingly, A10 Capital’s unconventional loan enables the bank to assist its customer with a difficult situation to finance, while maintaining the primary banking relationship.
  • Referral-fee income opportunity

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