Commercial Real Estate Loan Size Matters

If you  need a large commercial real estate loan, go to a large bank.  If you need a small commercial real estate loan, go to a small bank.

Banks are not allowed to make commercial real estate loans that are too large compared to the amount of their capital.  The regulators don't want them to put all of their eggs into just one basket.  For example, if a small, local bank has just $200 million in capital, the regulators certainly don't want this little bank making a $100 million commercial construction loan.

On the other hand, the huge banks, like Deutsche Bank, JP Morgan Chase, and Credit Suise usually don't want to mess with tiny commercial real estate loans.  These huge banks have tens of billions of dollars in capital.  They don't want to mess with little $200,000 deals.  Instead, they want $200 million deals.

So as you are shopping your commercial real estate loan, try to size your lender to the size of the deal in hand.  If you have a medium size deal - say $2 million - then maybe you should apply to some medium-sized regional bank that has 40 or so branches over two or three states.  If you have a tiny deal, look for the tiny First National Bank of the Northeast Corner of St. Louis.

You can also find lots of commercial real estate lenders of the perfect size using C-Loans.com.