Q1 2017
Thank you for the opportunity to share general information relating to the commercial real estate industry and what's new at The Loan Company of San Diego.

The Loan Company is a private direct lender, making commercial and residential real estate investment loans fast and easy. WE ARE COMPETITIVELY PRICED WITH RATES STARTING IN THE HIGH 7% RANGE. We specialize in real estate investment loans on all income property types, and we also consider renovation and construction loans on certain property types.



I expect the interest rate borrowers will pay for short term private money or “Hard Money” won’t increase much if at all this year. Even with the Fed raising short term interest rates last month and with the modest increases scheduled for the rest of the year, I believe private money rates won't rise at the same pace. This is due to basic economics of supply and demand. There still is a lot of private money out there looking for deals, keeping private money rates relatively stable, at least for the near future.

With the Fed raising short term interest rates, the market has reacted rather slowly pushing long term interest rates only slightly higher, but nonetheless long term rates have risen. Borrowers need to consider the implication of an interest rate rise for conventional financing when purchasing and refinancing their properties, because rising rates will ultimately affect the amount you can borrow.

During the low interest rate environment over the last six years, the Loan to Value Ratio (LTV Ratio) was usually the determining factor in determining the largest loan amount a lender would lend; however, that will change if long term rates continue to rise. It will soon become the Debt Service Coverage Ratio (DCSR) and longest amortization that determine the largest loan amount.

DSCR is expressed as the property's annual net operating income divided by the annual loan payment (Principal & Interest). A typical DSCR minimum range used by conventional lenders is from 1.20:1 to 1.35:1.

For longer term loans, The Loan Company requires the income property generate sufficient cash flow to adequately service the debt. We typically require a DSCR of 1.10:1 minimum and in some select cases with adequate additional security will go as low as breakeven using our interest rate when underwriting income property loans.

Many of the loans The Loan Company funds are bridge loans with conventional financing as the take-out source. As you plan your exit strategy from a bridge loan, remember the amount you can borrow from a conventional lender will decrease with long term rates rising based on existing DSCR requirements.

In most cases to maximize your loan amount in a rising rate environment, choose the lender using the lowest DSCR, the lowest interest rate and the longest amortization.


As shown in the examples above, the way The Loan Company underwrites its loans you will typically be able to refinance out of The Loan Company loan with conventional financing at today's rates.

For conventional financing all factors remaining the same, the higher the interest rate, the less funding available to the borrower. To make the best short term decisions, consider future financing options, more specifically which way the interest rate is trending.

To adequately price deals on the front end, keep in mind that your ability to maximize leverage on your income property with conventional long term financing will decline as interest rates rise.

On a positive note, when the Fed raises short term interest rates, it believes the economy is growing and improving; therefore, your ability to raise rents and increase your property's net operating income should also improve.




The Loan Company financed a ground up $2,400,000 construction loan for 11 multi-family apartment units in Little Italy near downtown San Diego. The borrower's at InDev did an incredible job developing a Class A project that was 100% leased prior to finish and the construction loan was paid off by a permanent loan at completion.

Another example of The Loan Company helping people achieve their financial goals at the same time improving our local communities.
$1,850,000 Purchase
Arco Am/Pm Gas Station
Murrieta, CA


$355,000 Purchase
SFR Investment Property
San Diego, CA


$1,100,000 Refinance
 Multi- Tenant Commercial P
Lemon Grove, CA
Click on the images above to learn more.

8 Simple Tips to Write Better Property 
by Sharp Launch

Property descriptions are one of the most important elements of any commercial real estate listing.

They can quickly communicate the value of your property and can help persuade potential clients to pick up the phone and get in touch with you.

If you’re about to start the marketing process for your listing… then go the extra mile and make sure to write an effective property description.

Click below to read more that includes what you "should do" and "should not do" as well as examples of property descriptions that will help you get your listings sold.


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John Lloyd Call us for more information about obtaining a commercial real estate loan.
John P. Lloyd
T: 619.293.7770 ext. 20
E: Jlloyd@theloancompany.com

CA DRE Broker License # 01376920
NMLS ID #345838


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The Loan Company - 2356 Moore St. Suite 201 - San Diego, CA 92110