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Tips for Success in Tough Lending Market

Member to Member Solutions is an ALFA member benefit that draws from allied members’ expertise and unique perspectives to educate ALFA Provider Members. If you would like to write an article or read past articles, please visit alfa.org/membertomembersolutions. ALFA makes this information available as a service and in no way endorses the products and services discussed below and in no way ensures the accuracy of the information. Please contact the company for complete information.

Written by: Cambridge Realty Capital Companies



Owners and operators of senior housing need to recognize and avoid failed funding strategies that effectively place the cart before the horse in a tight credit market, Jeffrey A. Davis, chairman of Chicago based Cambridge Realty Capital Companies advises.

By necessity, Davis believes senior housing borrowers must focus on operations and improving systems, and on developing better financing game plans. He offers this advice to borrowers:

  • Understand your financing needs. Before starting a dialogue with a lender or financial intermediary, understand the type of loan you’re seeking, i.e., construction, permanent or rehab/expansion.

  • Understand your lender/investor’s needs. Remember that lenders are motivated to get your loan done if it is realistic.  But it’s up to you to qualify for a good loan.  The more you know and understand and are able to articulate, the better impression you will make with the lender.

  • Have realistic timing goals. Realize that even a fast moving financing transaction will take 90 to 120 days. To make sure that your loan is on the fact track, make sure that all materials are assembled in advance and ready to present upon request.

  • Research the alternatives and choose the best lender/financial intermediary to deal with. Many borrowers do not feel comfortable dealing directly with lenders and choose to have a consultant/financial intermediary represent them. To insure a better chance for success, those who do deal directly with lenders need to make certain they are talking with a decision maker and not a lower level loan officer.

  • Thoroughly understand your community. Understand that you are the expert where your community is concerned. And that any lender’s questions about your community are fair game. This includes the number of units, current rates, expenses, current census, census breakdown, and so forth. The more you know and understand, and are able to articulate, the better impression you will make with the lender.

  • Have accurate data. Providing inaccurate data will quickly disqualify a borrower.  Review in advance all statements and census data and assemble all legal data. Make sure you have reviewed in detail all current debt. If you will be paying off the debt, make sure that debt is open to prepayment.

  • Process lender/investor requirements quickly. More than half the responsibility for a prompt loan closing lies with the borrower. When a lender requests updated numbers or additional data, it should be delivered promptly. Have three years’ historical data up to speed and copied, and ready to present. Also, have enough area data put together so that your lender can be sufficiently knowledgeable about the context of your loan.

  • Be open-minded during your financing discussions. Borrowers who think they have all the answers will usually wind up turning off most lenders, who are the real experts. It’s always a good idea to respect your lender’s expertise; if you can’t, find another. Inquiring questions are usually accepted and even encouraged by lenders.

  • Remember that talk doesn’t make deals. However, a quality presentation with excellent material does. Successful applications are all about quality paperwork.

  • Court long term relationships. The first loan you make with a lender can be the beginning of an important long term relationship. Be prepared to listen and learn.


Cambridge realty capital companiesFounded in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nation’s leading senior housing and healthcare debt and equity capital providers, closing more than 200 such transactions, totaling more than $1 billion, during this period. Although Cambridge has grown considerably over the years, the company still maintains its entrepreneurial, privately held roots, enabling fast, non-bureaucratic decisions, and is a “one-stop” debt and equity capital solutions provider for senior housing and healthcare owners and operators. The company’s own award-winning Web site, www.cambridgecap.com, provides weekly rate updates on its debt and equity capital programs and real time interest rates.



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