Rates for Small Business loans

Current benchmarks and forecasts for small commercial bank loans

This report gives you a graphical tour of small business credit markets, including average rates, terms and other vital data. Knowing these norms will give you valuable leverage when negotiating for the best deal. Rates and terms will vary based on region, the health of a company and the value of its assets. Figures are revised as new reports become available, so check back at least once a month for updates. The report includes:
Current Interest Rates
Survey of Borrowers: A poll of more than 1, 000 small companies by the National Federation of Independent Business. Figures reflect the average interest rate on new short-term loans. While figures arent as authoritative as the Federal Reserve survey of lenders (below), the NFIB's monthly poll is more timely, and its movements have closely approximated the government data.

Survey of Lenders: A quarterly survey of 400 banks by the Federal Reserve Board. The rates reflect commercial loans made by a broad variety of banks: domestic and foreign, large and small. It does not include independent finance companies. Figures reflect all loans in all risk categories of less than $1 million, broken down by size above and below the $100, 000 mark.

Key Provisions and Terms
Where You Are Most Likely to Find...

The Lowest Rate: Compares the average rate on small commercial loans based on the type of institutionall domestic banks, large domestic, small domestic, and U.S. branches of foreign-based banks. Foreign banks tend to offer the lowest rates, while small domestic banks are usually highest.

The Longest Maturity: Compares the average maturity or interval between rate adjustments among the types of institutions listed above. A longer maturity is usually more desirable, especially when rates are rising, because it brings stability to your financial planning. In recent years, small domestic banks usually offered the longest maturity. Maturities at foreign-based banks were shortest.

A Call Provision: This allows a banker to demand full payment of a loan ahead of schedule if you fail to make payments or specific business performance goals. As a rule, most borrowers would prefer a non-callable loan. In recent years, less than a third of the value of small commercial loans have included a call provision, but foreign-based banks are almost twice as likely to insist on one.
A Prepayment Penalty: This is a fee, often quite stiff, that banks charge if you pay off a loan early, which you might want to do if rates fall sharply. A prepayment penalty favors the banker, unless you get a substantial discount on the initial interest rate. Only a small fraction of recent loans have included this clause. If youre offered a loan with one, ask if the bank will delete it.

Kids Can Press, Ltd. One Hen - How One Small Loan Made a Big Difference (CitizenKid)
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2007-12-07 19:05:18 by GeorgeBailey

Some Construction Loans Are Delinquent

Figures compiled by the Federal Deposit Insurance Corporation and released last week show that both midsize and small banks had construction loans outstanding that were greater than their total capital. A decade ago, such loans were equal to only a third of capital for those banks.
For most of this decade, that was a good strategy. Construction loans proved to be very profitable, particularly for smaller banks as competition from larger banks and securities markets eroded their position in areas like mortgage lending and credit card issuance

2012-06-26 09:34:39 by 50PercentHaircuts

2nd Wave of Home Foreclosures coming to SanDiego

SAN DIEGO, Jun 26, 2012 (BUSINESS WIRE) -- Blue Sky Capital, a San Diego-based real estate investment firm, says San Diego County is in store for a second wave of foreclosures, much bigger than the foreclosure wave that hit the county several years ago.
Blue Sky Capital has been tracking area properties and found that mortgages secured with Option Arm and Alt-A funding are about to reset at much higher rates. That will mean larger mortgage payments for homeowners who can't afford it, pushing many into foreclosure.
"While these Option Arm and Alt-A loans exist throughout the county, areas like Carmel Valley are filled with them

2009-10-31 10:45:11 by FWLittle


The market dropped Oct. 30 by 2.5%. On that date, in most metropolitan areas, unemployment was reported as having reached an all time recent high. Many CLMO forum repliers claim that the banks have cut-off, declined to extend additional credit, and/or increased their interest rates. Small business are being quoted loans at 80% interest monthly (really).
No one has seen a basic Bay Area 2BR home price decrease in six months, but do extend the FTHB $8,000 Buyer Credit to help move the nine month inventory. Each clunker that was processed (to date anyway) in the rebate program cost the government $24,000 in lost taxes

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