In a recent discussion with Brian Bailey, Commercial Real Estate (CRE) expert at the Federal Reserve Bank of Atlanta, we explored the current economic landscape, its effects on lending, and critical factors influencing the commercial real estate sector. Bailey offered insights into today’s resilient but evolving market and practical steps lenders should consider in navigating this environment.

Watch the YouTube Video: https://www.youtube.com/watch?v=CueBgKt3lnQ 

Welcome back to another insightful episode of the Smarter Lending Podcast! A second part of our series on SBA (Small Business Administration) Construction Lending, featuring experts Nick Jellum, Michele Walters, and Trevor Richardson covered a wide range of essential topics, from pre-construction due diligence to managing disbursements and ensuring the proper use of lien waivers.

Key Takeaways from the Episode

1. Thorough Pre-Construction Analysis Trevor emphasized the importance of a comprehensive pre-construction analysis. This step is critical for identifying potential issues in the drawings, budget, and contract before construction begins. By addressing these concerns early, lenders can mitigate risks and set the stage for a successful project.

2. Effective Management of Disbursements Michele and Trevor shared best practices for managing disbursements during the construction phase. Monthly disbursements using AIA Applications for Payment and physical onsite inspections ensure that the project's progress is accurately tracked, and funds are appropriately allocated.

3. The Critical Role of Lien Waivers Lien waivers are essential for protecting the project against outside liens and ensuring that funds are distributed to the right parties. Both conditional and unconditional lien waivers should be collected and properly filed to maintain legal protections and financial clarity.

4. Proactive Monitoring and Communication Keeping the project on schedule and within budget requires constant communication between all parties involved. Trevor highlighted the need for accurate Applications for Payment and a diligent review process to ensure that disbursement requests are justified and properly documented.

5. Addressing Common Issues From over-budget construction to seasonal delays, Michele stressed the importance of having tough conversations early with borrowers and contractors. By addressing potential shortfalls as soon as they arise, lenders can prevent project delays and financial complications.

Welcome to the latest edition of our Smarter Lending Podcast, where we delve into the complexities of distressed properties—a pressing issue in the commercial real estate sector. Hosted by Liz Mahoney, we tackled this challenging topic with expert insights from Noelle McDonald, VP of Valuation Services at LCS, and Aaron Fehnel, VP Loan Workout Manager at Tompkins Bank.

Welcome to the latest blog post of "Smarter Lending"! Today, we're excited to announce a brand new episode from our podcast, titled "Building Smarter: The Onset of Construction Due Diligence." This episode marks the beginning of a compelling two-part series focusing on the nuances of Construction Due Diligence within SBA Lending, a topic critical for lenders, borrowers, and professionals within the construction industry.

Hosted by Liz Mahoney, Director of Sales and Business Development at Lender Consulting Services, and an expert with 16 years of national lending expertise, this episode is a treasure trove of insights. Liz, alongside a panel of distinguished experts including Michelle Walters (SBA Loan guru), Nick Jellam (President of Jellam Law, PA), and Michelle Alabiso (Senior Project Manager and Director of Construction Operations at Lender Consulting Services), delve into the complexities that differentiate new construction from renovation projects. They unravel common pitfalls in SBA lending, emphasize the importance of meticulous due diligence, and share horror stories that underscore the risks of non-compliance and financial mismanagement.  

Key takeaways from this episode include:

• The contrasting due diligence processes for new constructions versus renovations, highlighting the unique challenges each presents.
• Insights into common pitfalls for SBA lenders, with expert advice on maintaining compliance and financial health during construction projects.
• Real-life horror stories serving as cautionary tales for those navigating the construction lending landscape.
• Practical guidance on red flags to watch out for in construction projects, the significance of plan, specification and cost review (PSCR), and effective solutions to common due diligence issues.
• An exploration of the legal ramifications of inadequate due diligence and the protective measures lenders can take.
• This episode not only educates listeners on the ins and outs of construction due diligence but also equips them with the knowledge to navigate the complex landscape of SBA lending more confidently. Whether you're an industry veteran or new to the field, "Building Smarter: The Onset of Construction Due Diligence" offers valuable perspectives to enhance your understanding and practices in construction lending.

In addition to the wealth of information shared in our podcast, Lender Consulting Services (LCS) stands ready to assist SBA Construction Lenders in navigating their due diligence needs. Our expertise and tailored services ensure that lenders can mitigate risks, comply with regulatory requirements, and support their clients effectively through the construction process. From plan, specification and cost reviews to risk assessments, LCS provides the necessary tools and insights to facilitate a smooth and compliant lending experience. Leveraging our services means partnering with a team that understands the intricacies of SBA lending and construction due diligence, helping lenders to not only prevent potential disasters but also to streamline their processes for efficiency and success.

Don't miss this insightful discussion. Tune in to "Smarter Lending" for smarter strategies and insider knowledge that keeps you ahead of the curve. Stay tuned for our upcoming second episode in this series, where we'll continue unraveling the intricacies of Construction Due Diligence in SBA Lending.

In this inaugural episode of the SmarterLending Podcast from Lender Consulting Services, host Liz Mahoney interviews 3 appraisal experts:  Noelle McDonald, the VP Valuation Services, and Rachel Kilcullen, Director of Evaluations, both at Lender Consulting Services, and Cheryl Bella, M.A., FICRAS, who is a Certified Appraiser who actively works in the banking industry as an appraisal compliance consultant.

This episode is a deep dive into the rules and regulations around utilizing valuations. When is it appropriate to use, versus an appraisal or a validation report? Techniques used how regulations and internal policy come into play and more.

Subscribe and follow along at – https://www.lenderconsulting.com/smarter-lending/