Chicago, IL (PRWEB) November 03, 2012
Clopton Capital, a commercial financing provider based in Chicago, IL, is making the acknowledgement that access to commercial capital is more difficult now than at nearly any other time in the last century. They do however want to stress that this is a paradoxical climate for commercial lending where the payoffs are greater because the barrier-of-entry is greater as well.
“To borrow X amount of commercial capital at favorable rates and under preferential terms, you almost always need to have in one means or another the net worth which is equivalent to the amount being borrowed. In a perverse way, commercial lending in today's world isn't so much lending as it is taking on extremely low interest debt in exchange for not suffering the opportunity cost to pull capital and liquid assets from where it is currently allocated. For instance, if someone if currently earning an average of 6% interest in safe investments, it is better to borrow on a commercial mortgage at 3% than to take this capital out of the investments. This environment creates situations where less buyers are capable of bidding on the same commercial real estate and the few borrowers who can pass the muster of commercial loan underwriting are able to acquire more and compete with fewer property managers thereafter owning their property. Commercial capital is both magnificent and devastating for this reason”, said Jake Clopton, the founder of Clopton Capital.
The firm feels that this environment will lead themselves and their competitors to have fewer clients borrowing larger sums of commercial capital at lower interest rates and on more favorable terms than ever before. Clopton Capital also believes this will mean that a greater number of less-than-advantageous commercial lending opportunities will fail by sheer competition with the abundance of superior opportunities within the commercial lending sphere of the American economy,