The Loan Committee™

The biggest red flag at a shopping center would be the presence or former presence of a dry cleaning operation. Many releases that occur as a result of a dry cleaning business were not necessarily the result of negligence and could even have resulted through an inadvertent discharge of small quantities of dry cleaning solvents through piping. Soil and groundwater cleanup target levels (CTLs) for dry cleaning compounds in the State of Florida are very low, i.e., you don’t need very much to cause a problem. In addition, these compounds are heavier than water and tend to “sink” in the aquifer, making a release more costly to assess and many times more costly to remediate.

A state funded program was in place to address releases from dry cleaning facilities. The State of Florida Dry Cleaning Solvent Cleanup Program (DCSCUP) provides State funded assessment and remediation of soil and/or groundwater that has been contaminated as a result of dry cleaning solvents from dry cleaning facilities. An eligibility requirement of the program did require that dry cleaning solvent compounds be detected in the soil and/or groundwater; however, it was not required that the detected concentrations meet or exceed regulatory limits in order to make an application to the program. Site remediation under the program did not include third party liability. Applications to the program were not accepted after December 31, 1998.

According to a representative of the Florida Department of Environmental Protection (FDEP), 1,563 dry cleaning facilities (current and former) that were contaminated as a result of a release of dry cleaning solvents, made an application to the DCSCUP. A total of 1,400 sites were deemed eligible for the program. FDEP however, believes that at least 2,800 facilities could have applied, indicating that only about one-half of these types of sites would have been eligible for the program.

It is also interesting to note that facilities deemed ineligible for the DCSCUP cannot be compelled to assess and remediate their sites if knowledge of the release was the result of having made an application to the program. Therefore, do not assume that a dry cleaning facility has not impacted the subsurface if they were deemed program ineligible.  Contact MADELINE FELL at mfell@sgfenvironmental.com for additional information regarding environmental concerns associated with dry cleaner facilities or questions regarding phase I environmental site assessments.

Back in the early 90’s, I was teaching bankers how to do SBA lending. I also helped in doing credit analysis and loan packaging. Everyone called me a loan packager. As my business has evolved into setting up SBA departments and finding people to fill SBA jobs, so has the cottage industry that seeks to support small SBA lending programs.  Today we call this industry that of the SBA Loan Service Providers or LSP. They come in all skill sets. Some just do SBA loan packaging. Others focus on SBA credit analysis, etc. There are a few that are what we might call “full service”, proclaiming that they have the expertise to be your entire SBA back office. While it would serve the SBA lending community for the SBA to classify LSPs as “certified” according to their skills and abilities, it will be incumbent upon you to check them out. Significant due diligence is required. read entire article…  Author: Tim Terry.  Source:  SBA Advisors.

Nineteen Miami-Dade and Broward banks received five stars — the highest possible — in the most recent ratings by Coral Gables-based BauerFinancial, based on March 31 results. Most of the banks also scored five stars at the end of the last year, although Apollo Bank and Coconut Grove Bank, both of Miami, rose to five stars from four stars previously, and Floridian Community Bank of Davie dropped to four stars at the end of the first quarter of this year, from five stars at year-end 2013.

Awarded the five-star “superior” rating were Miami-based Apollo Bank, Miami Lakes-based BankUnited; Biscayne Bank, based in Coconut Grove; Broward Bank of Commerce, Fort Lauderdale; Capital Bank, Coral Gables; City National Bank of Florida, Miami; Miami-based Coconut Grove Bank; Continental National Bank of Miami; Desjardins Bank, Hallandale Beach; Espirito Santo Bank, Miami; Executive National Bank, Miami; Florida Community Bank, Weston; Intercontinental Bank, West Miami; Marquis Bank, Coral Gables; Mercantil Commerce Bank, Coral Gables; Professional Bank, Coral Gables; Sabadell United Bank, Miami; Stonegate Bank, Fort Lauderdale; and TotalBank, Miami.

Bauer rated three Miami-Dade and Broward banks as “troubled and problematic,” giving them zero stars, down from four banks at the end of last year. The banks rated zero stars were: OptimumBank, Plantation; Doral-based US Century Bank; and Valley Bank, Fort Lauderdale. Great Florida Bank, which had received zero stars previously, was acquired by Florida Community Bank.

Ratings are based on such factors as profitability, capital, level of delinquent loans, charge-offs, repossessed assets and liquidity.  Posted: June 11, 2014.  Author: Ina Paiva Cordle. Source: Miami Herald Business

Technically, all IRAs are self directed, in that you can direct which investments your IRA account is placed into. Traditionally, IRAs are invested in securities, CDs, money market, etc. A self-directed IRA is one in which you can direct your IRA funds into all assets permitted by law.  Read entire article… Author: William Bronchick, J.D. Source: CRE Online.

Florida-based banks grew their loans more than four times as fast as the national average in the first quarter as their profits improved.  The 192 banks headquartered in the state increased their loans a combined $2.2 billion, or 2.2 percent, in the first quarter to reach $101.3 billion, according to the Federal Deposit Insurance Corp.  Read entire article… Author:  Brian Bandell.  Source. South Florida Business Journal.

SBA lenders must be aware of the need to order environmental studies on properties that serve as collateral on a SBA loan.  An Environmental Investigation must be conducted before taking any Loan Action that could result in a loss, or increase the risk of loss, due to the actual or alleged presence of Contamination. For example, an Environmental Investigation must be conducted before:

• Accepting Property as substitute collateral;
• Releasing a lien on collateral for substantially less than its estimated Recoverable Value based on unsubstantiated allegations of Contamination;
• Abandoning collateral, which would otherwise have Recoverable Value, based on unsubstantiated allegations of Contamination;
• Acquiring title to Property held as collateral, e.g., by purchasing it at a foreclosure sale or accepting a deed-in-lieu of foreclosure;
• Taking over the operation of a business that uses Hazardous Substances or is located on Contaminated Property regardless of whether the Borrower owns the Property;
• Selling REO or acquired personal property collateral for substantially less than its appraised value based on unsubstantiated allegations of Contamination; and
• Abandoning REO or acquired personal.

Read entire article… Source: Prudent Lenders, LLC. Author: Lance Sexton

Industry performance is better than previously thought, but success is getting harder to repeat. Investors and firms will need to adapt to changing conditions. Read entire article…. Authors:  Sacha Ghai, Conor Kehoe and Gary Pinkus.  Source: McKinsey & Company.