F & M understands that commercial real estate loans are never a “one-size-fits-all” process. That is why each client and loan request is treated uniquely. F & M Relationship Managers, with a wealth of experience, are adept at drilling into unique situations. They carefully listen to the borrower’s project to structure a loan to meet those needs. Below are three such examples of how F & M designed a loan program to meet specific client needs.
NO PREPAYMENT PENALTY
An F & M client had an industrial property that they had owned for many years. The client was on their third refinance of the property and wanted it to be the last loan. F & M structured a 10-year fully amortizing loan that also featured a no prepayment penalty so that, should a liquidity event occur (e.g. inheritance, sale of another property, etc.), the client would be able to pay the loan down or off with no added fees. The client enjoyed a fixed rate for all ten years, which allowed cash flow to remain steady from a debt standpoint.
1031 EXCHANGE
F & M can offer simplicity and flexibility through the 1031 exchange process. An F & M client sold a commercial property in order to purchase retail storefront, multi-family, and industrial properties while still maintaining compliance with 1031 exchange rules. To ensure the client was able to acquire the properties identified, F & M structured a Master Loan Agreement (MLA) with a $9 million maximum that the client was able to draw on once they secured a new property (60% LTV for all properties in the MLA). The MLA allowed the borrower to make purchases with conservative advance rates so the subject properties would meet specific loan covenants designed to protect the borrower (and F & M) from potential economic recessions. F & M’s interest rate reflected the unique structure. To provide flexibility to the borrower during the transition, the transaction was designed as interest-only for one year before converting to a fully amortizing loan. By utilizing an MLA, the client was able to avoid the time required to create individual loans and loan documents.
RENOVATION LOAN
While another F & M client was in escrow on a “value-add” 100-plus unit multi-family project in Ventura County, the Tenant Protection Act was signed by the Governor. Due to the passage of this new law, it would take the property five years to reach market stabilization, rather than the planned two years. The client’s business model planned for a face-lift of interior, exterior, and landscaping that could only be executed upon tenant move-out due to the new law. To assist the client under these new circumstances, F & M structured a Renovation Loan for 60% of the appraised value and interest-only payments for five years, allowing the client to purchase and renovate the property with maximum cash flow during rehabilitation and lease-up.
CLIENTS COME FIRST
The client experience with F & M is different because the business is designed around the client’s needs. It is a rarity today to find Relationship Managers who have their office within a bank branch, like F & M’s Relationship Managers. From on-site decision making, to a credit administration team that works as diligently as the Relationship Managers, F & M can operate quickly to develop a solution for industrial, retail, office or even those special, unique situations. F & M Bank offers a variety of loan programs including bridge, construction, term loans, and lines of credit.
THE F & M BANK ADVANTAGE
• No Prepayment Penalties
• No-Point Options Available
• Competitive Rates and Terms
• Fixed and Adjustable Rates
• Flexible Amortization Schedules
• Cash Out Refinances Allowed
• Incented Rates for Faster Amortizations
• Local Decision-Making
Farmers & Merchants Bank is a regional bank with deposits insured by the Federal Deposit Insurance Corporation (Member FDIC) and is an Equal Housing Lender. All loans are subject to credit approval.
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