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 Commercial Real Estate
Speculative Construction
Construction/Permanent
Commercial Construction/Permanent
Business Village Reserve
Lines of Credit
Standby Letters of Credit
Term Loans
Time Loans
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Commercial Real Estate
The Bank offers commercial real estate financing for both owner-occupied (where business is headquartered) and investment properties (example: 5+ unit apartment buildings). Maximum amortization term is 20 years with exceptions made to 25 years. Rates are fixed at 5 year increments.
Speculative Construction
Builders seek speculative construction financing for both acquisition and development. Acquisition funds are disbursed at the closing. Construction funds are held back and disbursed as work is completed. A mutually agreeable disbursement schedule is negotiated prior to closing. An appraisal gives us two values: “as is” and “upon completion,” neither of which can exceed 75% loan-to-value. The term is one year and repayment is interest only. Rates are found on the rate sheet and usually include one point.
Construction/Permanent
Homeowners seek construction/permanent financing for acquisition/development or renovations to their existing home. The first is a purchase transaction while the second is a refinance. The homeowner can choose from our adjustable rate products plus one point. The first year is interest only. The loan automatically converts to a permanent 29 year mortgage per the original terms of the ARM note. Acquisition or refinance funds are disbursed at the closing. Construction funds are held back and disbursed as work is completed. A mutually agreeable disbursement schedule is negotiated with the builder, customer, and Bank prior to closing. An appraisal gives us two values: “as is” and “upon completion,” neither of which can exceed 80% loan-to-value.
Commercial Construction/Permanent
Business owners seek commercial construction permanent financing for acquisition/development or renovations to their existing owner-occupied commercial building. Rates and terms are negotiated, but will always include one year interest only during the construction period. The loan automatically converts to a permanent mortgage per the terms of the note after the initial period. Acquisition or refinance funds are disbursed at the closing. Construction funds are held back and disbursed as work is completed. A mutually agreeable disbursement schedule is negotiated with the builder, customer, and Bank prior to closing. An appraisal gives us two values: “as is” and “upon completion,” neither of which can exceed 75% loan-to-value.
Note: Call lending for requests for non-owner-occupied commercial construction.
Business Village Reserve
Similar to the Village Reserve for personal use, the Business Village Reserve is for commercial use. The no income verification “matrix” cannot be used for underwriting. The Loan must be underwritten in lending using business financials. Loan is for the purpose of overdraft protection. Maximum loan amount is $25,000.00. Loan application is also the loan note.
Lines of Credit
In addition to the BVR to cover the occasional overdraft, a company may also seek a Line of Credit for seasonal or other working capital needs. All lines of credit are reviewed annually and are on demand. Therefore, annual financials are required, and the Bank can make amendments as needed based on credit-worthiness. Lines of credit are tied to the WSJ Prime Rate plus a margin determined by lending. There are usually annual review fees equal to .5% of the unused balance. Lines of credit can be used and paid back without penalty.
Standby Letters of Credit
A business owner may need a standby letter of credit to pledge to a creditor or landlord. The Bank is acting as an intermediary in this transaction. The customer pledges a cash account to the Bank and the Bank writes an SLC to the creditor that states we will give them the cash in the event of default of the business to the creditor. We will only complete this transaction with cash or equivalent collateral. We charge an annual fee.
Term Loans
A business owner may need a term loan when purchasing or refinancing equipment (ie. machinery, computers, phone systems, etc.). We will lend on a percentage basis of the collateral which may change depending on the collateral type. The term is usually a maximum of 5 years and amortizes on a daily interest calculation.
Time Loans
Time loans are used for the same purpose as a term loan, but are written in short-term increments of 30, 60, or 90 days. Payment is due in full at that time. A time loan can also be written for short-term financing on an unsecured basis when the Bank is working on a larger transaction.
For more information Contact The Village Loan Center at 617-964-0117.
You Have a Friend in the Village!
For more information on any of our products or services, please complete our information request form, or call (617) 527-6090.
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