As the lending landscape evolves, commercial real estate professionals in the Hudson Valley are encountering increased scrutiny and regulatory complexities. This was a key takeaway from a recent panel hosted by the Hudson Gateway Association of Realtors’ (HGAR) Commercial & Investment Division in White Plains, where prominent industry leaders shared insights into the current lending environment.

“Regulatory oversight has intensified, making the process of closing loans more challenging,” said Elizabeth Arato, Senior Vice President of Commercial Real Estate at Customers Bank. Speaking at the September 26 event, Arato noted the added layers of diligence now required to navigate heightened regulatory pressures.

Panel moderator Robert Withers, President & CEO of M1 Capital Corp., echoed these sentiments. “There are still some risky loans out there, but the focus should be on a borrower’s overall track record. We need more practical, make-sense lending approaches,” he stated.

Michael Haberman, President of Rock East Funding, highlighted challenges faced by private lenders. “Rising interest rates have pushed property owners to refinance, while also dealing with increased insurance and energy costs,” he explained. Although some capital providers have grown cautious about long-term commitments, Haberman expressed optimism about their eventual return to the market.

Dana Malley, Senior Vice President at Harvest Small Business Finance, emphasized the importance of thorough evaluation in SBA-guaranteed loans for owner-occupied properties. “We assess assets, cash flow, and financial history carefully, whether for refinancing or expansion,” Malley said.

The panel also discussed how external factors, such as unexpected medical expenses, could impact credit scores. Haberman suggested lenders take a more holistic view of borrowers’ payment histories to address such issues.

On the topic of recent Federal Reserve interest rate cuts, Arato predicted increased activity in the market. “Borrowers in the pipeline will want to close at lower rates, and these cuts are likely to drive more deals forward,” she remarked.

All panelists agreed that relationship-driven lending remains crucial. “Customer service is everything,” said Arato. Haberman added, “Ninety percent of our clients are repeat customers because we make the process straightforward.”

For small businesses, Malley pointed to a recent SBA policy change that raises the $5 million borrowing cap for those with multiple enterprises. “This allows us to offer multiple products above the previous limit, enabling greater expansion and benefiting the local economy,” he explained.

The panel underscored the importance of adapting to shifting market dynamics while maintaining strong client relationships to navigate challenges effectively.