While throughout most of American history banks have existed as relatively small entities, deregulation over the past several decades has given rise to large national institutions. These “money center” banks are able to lend over LIBOR and borrow from the Fed’s discount window. Smaller regional banks usually price over Prime.

Banks are the main source for construction financing. In addition, certain banks will do permanent and bridge lending. Due to their revenue schedule (primarily from CD’s), banks are hesitant fix a rates for over 5 years.

While credit companies lend on the value of the property, banks lend on the balance sheet of the borrower. Therefore, they take into account the global cash flow of the borrower during the loan application process. Consistent with this level of scrutiny, bank loans are usually partial or full recourse.

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