BORROWING OUTLOOK 

A Wall Street Journal article on ‘The Coming Crisis in Commercial Real Estate’ indicated $524 billion in overall commercial real estate loans will be maturing and needing refinance by 2013. It also noted that 2,500 banks may fail in the next few years far outstripping the S&L and bank crisis or the last recession. This forecast is playing out and we are in a protracted credit crunch. Due to stricter credit standards borrowers need to place their best foot forward when seeking capital and utilize lender friendly loan programs such as the USDA B&I program for rural business and property locations.

LENDERS OUTLOOK

The USDA B&I loan program had its biggest year and Congress is now being solicited to approve an annual loan budget in excess of the standard $1 billion. Lenders now have their arms around their problem loans and are making steady progress. However, this will keep many lenders frozen as they are in a capital raising mode and significantly slow others due to concentrations in their loan portfolios. Well capitalized lenders will seek to to pick up market share but minimize risk. To conserve capital, serve customers better, generate new fee income and mitigate risk more lenders will seek to become active in USDA B&I Government Guaranteed lending.