Bank and private lenders in Arizona, side by side

Sponsors ask which is better, a bank or a private lender. The fair answer is that they are built for different moments. A bank holds portfolio loans, often wants a relationship, and is examined on how it manages commercial real estate risk. A private lender is not that charter. It can finance a plan, a renovation, or a date that does not fit a bank committee. Neither description is an insult. A bank that fits the rent roll is a good path. A private loan that fits a gap is a good path. Calling one of them reckless, or the other one slow as a class, is a ranking this page will not make.

The Office of the Comptroller of the Currency's March 2022 Commercial Real Estate Lending booklet is written for the OCC's supervision of national banks and federal savings associations. It covers acquisition, development, and construction financing and the financing of income-producing real estate. The FDIC publishes a risk-management manual of examination policies for the banks it examines. Those documents explain why a bank file can feel heavier. They are not a reason to avoid banks, and they are not a loan from Capital Market Funds. The Mortgage Bankers Association's research section is national industry context, not an Arizona scoreboard.

Speed, recourse, covenants, and income that is not ready

Speed is the reason people call. A bank may need a committee, a deposit conversation, and a third-party report before it will set a date. A private lender may have a shorter list and still say no. A shorter list is not a promise. Ask what is left, and do not treat a contract deadline as the lender's deadline.

Recourse is who pays if the property does not. Banks often want a guarantor. Some private loans do too. Non-recourse, when it is offered, still has a list of acts that bring the guarantor back. Read that list with counsel. This page is not legal advice. Covenants are the ongoing tests: coverage, cash, reports, and what happens if a tenant leaves. A loan with few covenants can still have a short maturity. A loan with many covenants can still be the right hold if the property is stable.

Transitional income is the other split. A bank coverage test often wants net operating income that already covers the payment. A private or bridge lender may finance the period before that income exists, and it will price the risk in its own documents. We do not print that price. When the building is ready for a long loan, the bank or another permanent lender is a new conversation, not an automatic extension.

Where to take an Arizona file

Portfolio bank debt is arranged on the Arizona bank page. We are not the bank. Short capital from private lenders is Arizona bridge. The search phrase people use for that short loan is written up as Arizona private bridge, and the broader private-credit note is Arizona private money. In each case the lender of record is the bank or the private lender. Capital Market Funds is not a Fannie Mae DUS lender.

Structure without coupons is the lender-type comparison. Bridge types, still without a ranking, are the bridge lender landscape. A bank that is local versus a larger bank is community versus regional. Bank debt next to a life company or CMBS is bank, life, and CMBS.

The office is 7373 E Doubletree Ranch Rd #255, Scottsdale, AZ 85258. The phone is (480) 495-8072. Arizona CMB-1047342 and NMLS 1445066. Sending a rent roll does not commit a bank or a private lender.