What Factors Do You Use To Down-Select Your Small Regional Bank Partners?

[Bryan Hancock]

I have pretty much called every known viable bank or credit union in the greater Austin area in the past year and we now have 15 solid lenders that will loan on specs or our rehab projects. This presents an interesting "problem" of needing to keep our relationship active with them or to down-select and bracket them into the most desirable camp and the other camp.

If anyone has experience with this or thoughts on how to categorize them it would be helpful. These are the main items I am thinking of using:

1. Who will loan the most. Believe it or not 85% LTC with traditional lenders is available from a few lenders and as much as 95% LTC is available with what are closer to asset-based lenders

2. Who will offer guidance lines. $500k guidance lines seem to be fashionable currently to start out with

3. Who has the best service and is responsive to emails

4. Rates are currently 4th on my list, but are certainly important. Everyone is within 1-2% though and for short-term money this doesn't matter a lot. Points are more important and most folks want a 1% origination fee; although some will go lower or to 0% for certain scenarios

What else would you want to know? Item 2 kind of ties in with how many loans they'll issue once the first set rolls out. Some folks will loan several to start out with. Many times this seems to be because they're getting less static from regulators or are more liquid at the time of the loan request.

Any guidance or commentary is appreciated. Note that this discussion is separate from equity raises and private lending. This is just about small regional bank financing. This financing is frequently superior to using other kinds for many projects we're working on.