When Wall Street pivoted toward the lending markets in a big way a few years back, they and other large, private lenders became a ready source of cheap, plentiful capital. Operating like banks, Wall Street-backed lenders often provided loans to all comers so long as borrowers fit their profile of a “safe bet.”
Fast forward five years or so and inflation, labor shortages, rising interest rates, and lowering property values have introduced levels of uncertainty that have soured the lending appetites of many Wall Street types. As a rule, the big guys don’t like uncertainty. Uncertainty makes them nervous, so they stop lending.
Borrowers who came to depend on Wall Street-backed lenders for construction or land acquisition loans suddenly found that their sources of cheap, plentiful capital were no longer there — often times mid-project.
Steady As She Goes
Enact Partners realizes the current environment makes many builders and developers nervous, too. They don’t want to purchase property or build at high prices and high interest rates only to be forced to sell low in order to pay off their construction loans. That said, given our extensive experience in real estate, land development, and construction, we remain confident in our ability to provide borrowers and builders the capital they need to acquire and develop property.
Our funds come from Main Street investors, not Wall Street. This means our rates are not directly tied to the Fed’s hikes, and we do not shut down due to macroeconomic trends the way banks and Wall Street-backed institutional private lenders sometimes do. (For example, during the height of the COVID pandemic, when many banks stopped lending, Enact Partners continued to lend.)
Unlike our bigger Wall Street-backed peers, we don’t think it’s time to pump the brakes. We continue to lend in today’s market. We do so responsibly, of course, linking borrowers to the capital they need to fund construction, land, and commercial bridge loans. We also find ourselves working with borrowers who have had their ability to draw on existing construction loans dry up for no fault of their own as lenders bail on projects at various stages of completion.
Can-Do Approach
Enact Partners can be more flexible and adaptable to market shifts compared to traditional banks and Wall Street-backed lenders. We can also be more creative and are more willing to listen to borrowers with innovative ideas — like how a loan from Enact Partners could help them finish their half-completed construction project.
While we scrupulously follow due diligence on all lending opportunities, our decisions often come down to the comfort level we have with a borrower and the project they have in mind. Through site visits and extensive discussions, borrowers can share their visions for a property with us and build their case, which often allows us to lend to them with confidence.
Even when borrowers don’t qualify for conventional financing due to previous foreclosure, bankruptcy, inability to substantiate income, or inadequate liquidity, we can often find a way that works for them and for us.
Your Trusted Direct Lending Partner
Builders and developers benefit from working with an experienced lender like Enact Partners because we understand the complexity of land acquisition, ground-up construction, residential fix and flip projects, commercial repositioning, value-add development projects, tenant improvements, and remodeling projects. We offer borrowers a single point of contact and direct communication with the decision maker (us), ensuring transparency and expediency throughout the entire loan process. We are here to listen and to find a way, if at all possible.
Contact Us About Your Borrowing Needs
(760) 516-7776 | [email protected] | www.enactpartners.com
