January 05, 2005

Commercial Financing - International Commercial Loans Are Extremely Difficult

In 30 Years of Commercial Mortgage Finance I Have Never Heard of an International Loan Closing

Every day I run across developers seeking commercial construction loans in Mexico or Poland or some other far-off locale. To the best of my knowledge, none of them ever get funded by American lenders.

The problem is one of taxation. If a Chinese bank based in Hong Kong were to make a big loan here in the states, the US government would levy a foreign lender tax of 30% of it's interest income! Most countries do the same to foreign banks trying to lend in their own country. (The way this problem is solved is that the Chinese bank starts a subsidiary bank here in the US and the subsidiary makes loans in the US.)

So if you are seeking a loan in Mexico, go to a Mexican bank. Go local. It's generally the right way to go.

If you need a commercial mortgage loan here in the United States, you can find 750 different commercial mortgage lenders on C-Loans.