Small businesses are an integral component of a thriving national economy. But according to NAR’s annual Commercial Real Estate 2012 Lending Survey, the lending environment is tightening for those businesses and hindering a commercial real estate recovery.
The survey revealed a significant split in commercial lending based on value. Larger commercial transactions valued at $2.5 million or more showed notable improvements in capital, while smaller businesses faced significant lending challenges. Many of the larger sales transactions secured lending funds from big banks, while smaller transactions rely heavily on regional and local banks, as well as small private investors for lending capital.
Cash only… The survey showed nearly 30 percent of smaller commercial properties are purchased with cash, reflecting the tight credit environment. Talk to a REALTOR® for insight into the commercial real estate environment. Are they seeing this issue in their area? Talk to small business owners about their experiences with lenders. Why is it so difficult for them to secure capital?