Commercial Lending On Main Street Is Dead, for now

Commercial banks are not lending on real estate or equipment assets.

It is not happening now, especially given the huge loss of Lehman and Merrill Lynch today.

Banks are looking for any reason to deny a loan. Commercial mortgage brokers, like myself, are getting very good deals in our doors - some of the best ever in terms of properties, cash-flow, sponsors and guarantors - and banks are finding any reason to kill the deal.

Why?

Those that tell the truth are saying they just don't have the money.

Pundits on the news channels are saying this is a problem self-contained on Wall Street, however, how will the small businesses looking to acquire inventory, or new equipment for new product lines, or larger facilities for growth, or new people for new contracts, how will they finance such expansion?

There is no money out there for small business, even with government guarantees such as SBA. At present, at least for last week and so far today, lenders do not have liquidity to approve loans.

Main street will suffer. Employees won't get raised, may lose jobs, may lose homes and won't be able to buy anything from other main street businesses.

The credit crisis has hit main street, and no one at the top knows about it. But those on Main Street are feeling the pain right now.