Questions & Answers

Questions & Answers for Investors

  1. Does my loan cost more than financing with a bank?
  2. Will my application get lost in the shuffle here?
  3. How does Steelhead have such great access to capital?
  4. How soon can my commercial loan close if I apply now?
  5. What criteria are lenders looking for in today's market?
  6. Does Steelhead work with commercial real estate brokers?
  7. Does Steelhead reward green business plans?
  8. How is Steelhead Capital different from my bank?

Does my loan cost more than financing with a bank?

Steelhead Capital charges a placement fee of one percent of the loan amount. Banks also typically charge a loan fee of one percent or add an equivalent discounted value into the spread. Because Steelhead Capital absorbs the cost of originating loans for the lender, we are able to negotiate direct pricing with most lending sources. As a result, borrowers typically incur no additional costs by engaging us to negotiate and manage their transaction.

In addition, Steelhead saves its clients time and money by creating an environment that forces the market to compete for the borrower's business. Ultimately, clients get all the cost benefits of a more effectively managed transaction without having to accept exorbitant spreads or large loan fees.

Will my application get lost in the shuffle here?

Steelhead Capital prides itself on taking a private banking approach to supporting client objectives. By choosing to engage a customer we are committing all of our resources to making their opportunity a success. Customers that work with us know that this often means going beyond the role of a typical advisor.

By company mandate, each Steelhead professional is limited to engage no more than five new clients below the application stage at any one time. Our clients are qualified on many of the same criteria that banks use in evaluating loans. However, beyond identifying whether we are capable of effectively helping a client meet their objectives, we typically require an exclusive engagement letter that obligates both parties to the relationship. By limiting the number of real estate investors we agree to represent, we are able to provide a full service, advisory experience that is unique in today's capital markets.

How does Steelhead have such great access to capital?

The goal at Steelhead Capital is to add value to customer transactions by offering a wide range of financing alternatives and direct access to top national, regional, and local lenders. We have funded deals through agencies, life companies, conduits, and "out-of-the-box" lenders. In addition to permanent debt financing, we regularly structure transactions using high-leverage bridge loans, mezzanine debt, construction loans and straight equity.

How soon can my commercial loan close if I apply now?

From the time the application is signed, most loans typically fund within 45 to 60 days. For small balance loans funding can happen within 30 to 45 days. In instances where we are engaged to secure traditional debt, Steelhead acts on behalf of the borrower to professionally package and present your loan request to the capital markets. Once a lender is chosen, we help negotiate the application, guide the borrower through the due diligence process and ultimately coordinate the loan closing.

What criteria are lenders looking for in today's market?

1) The borrower's net worth should be approximately equal to the property value. After downpayment and closing costs, borrower should be able to show 10% in liquid assets remaining.
2) Similar commercial real estate investing and property type experience.
3) Loan-to-Value (LTV) of 70%- 75%, up to 80% in select deals.
4) Ideally the property is located in a primary sector market that is among national locations showing signs of job growth and recovery.

Does Steelhead work with commercial real estate brokers?

Yes. Depending on the property, loan amount, and other qualifications we will consider financing a commercial loan in partnership with other brokers. Please submit your confidential loan request to learn more about the possibility of working together.

Does Steelhead reward green business plans?

Absolutely! Steelhead encourages environmentally sound and sustainable commercial real estate strategies. We feel the commercial sector has a great potential to help reduce carbon footprints. Investors with a green business plan will receive a discount on closing fees, to be determined on a deal by deal basis.

How is Steelhead Capital different from my bank?

At Steelhead Capital, our two main goals in any transaction are 1) to create a competitive environment that forces capital sources to compete for the borrower's loan and 2) to manage the transaction workflow so the borrower can focus on executing their business plans.

Banks are constrained by loan products and underwriting guidelines that don't necessarily fit the borrower's needs. The Bank's loan officers are incentivized to maximize profits while pushing as much of the risk as possible onto the borrower. Banks also force borrowers through a variety of hoops and typically provide only limited assistance managing transaction workflow.

Steelhead's approach is fundamentally different. Our fiduciary obligation is to you, the borrower. Since we are not limited by our affiliation with any one bank, we are able to present your loan to a broad spectrum of potential capital sources and secure the best terms and pricing that the market can offer. Equally important, Steelhead remains very much involved in the transaction, sharing the burden of collecting and processing information, coordinating third party reports and driving towards a smooth and successful close.

 

NEXT: Read reviews of Steelhead's customer service »

Steelhead Capital
505 Montgomery Suite 1100
San Francisco, CA   94111
Toll Free: 1-800-713-9220