Middle Market / Small Balance Commercial Lending

May 28, 2020

The commercial real estate industry is split on the wisdom of making middle market/small balance loans (MMSB). For the purposes of this post, we define MMSB loans as any loan under $20 million. Many mortgage bankers, lenders, and brokers view them as inefficient to invest in, broker, and or place. On the other hand, there are those that use a workflow that streamlines the process of administering MMSB loans, making them quite efficient. Even in today’s volatile climate, the MMSB loan market is quite liquid and has been impacted less by the COVID-19 disruptions than the large loan space.

Being an effective MMSB lender or intermediary it comes down to a couple of simple variables–experience, organization, and support. To be successful in this space you must have a deep understanding of the competitive lenders and experienced professions. Additionally, you need to be quick to underwrite, quote, and process. If any part of the process breaks down, you lose time. Your staff must be able to manage the closing and post-closing/servicing process efficiently.

Slatt Capital has had a long trade track record of placing loans in the MMSB loan space. We exclusively represent many lenders as a servicing correspondent in this space, enabling us to offer a superior “life of loan service” on these deals. Additionally, we are active with the most competitive open market lenders and have the strong relationships to execute successfully. For further information, please call one of our Slatt Capital representatives.