Commercial property loans in Massachusetts: who lends

If you own or are buying commercial property in Massachusetts, there are three places your loan can come from, and they behave differently.

Community banks and savings banks hold most of the small commercial mortgages in this state. They keep the loan on their own books, so terms vary bank by bank: typically a five-year fixed rate, a 25 or 30 year amortization, and a personal guarantee. Most want a deposit relationship along with the loan. The catch is appetite. A bank that wanted apartment buildings in the spring can be full on them by fall, and nothing on its website will tell you that.

Credit unions are the most overlooked lender in Massachusetts. Several write commercial real estate at rates that beat the banks, and some are more flexible on prepayment. Their commercial appetite varies more than any other group, which is why almost nobody shops them.

Private lenders and debt funds price higher and move faster. They are the answer when the property does not yet show the income a bank needs to see, when the closing date is close, or when the credit picture has a story to it. Rental-property DSCR loans, which qualify on the property's income instead of your tax returns, also come from this group.

A loan that one lender declines, another wants. That is not a sales line; it is how portfolio lending works. Each institution has concentration limits, deposit goals, and a credit committee with its own history. The work is knowing who wants what, this quarter.

That is the job we do. We keep a file on the banks, credit unions, and private lenders in this market and place each loan with the ones writing that type of deal right now. If you have a property and a need, send us the deal and we will tell you where it fits.