A common complaint by developers amid the credit crunch has been that even good projects are having difficulty getting financing by big banks and other established lenders.
Now, a Los Angeles startup is trying to help fill that void in the California marketplace.
Wilshire Finance Partners Inc. began making commercial real estate loans last month in the $500,000 to $3 million range, targeting everything from strip centers to small office building, and refinancing existing loans.
The lending operation was co-founded by Kevin DeMeritt, president of Lear Financial Inc., a Santa Monica-based precious metals company, and Thomas OBryon, who assumed the post of chief executive.
"Banks aren´t lending on good properties," said DeMeritt. "Maybe a borrower´s credit rating isn´t up to the bank´s snuff, but when you put everything together it is a perfectly fine loan that would have made sense nine months ago."
The company has already funded three loans, including the refinance of a strip mall in Venice. It also refinanced a Palm Desert apartment complex, which will be remodeled with funds allocated from the new loan
Capital for the startup came from the co-founders, who each contributed about $1 million, in addition to more than 30 other people who are making unspecified investments.
The company believes it has advantages in the marketplace aside from seizing on what it believes are "safe" investments that big lenders are passing on.
OBryon, with the assistance of software writers, developed a proprietary computer modeling program that DeMeritt said helps the company identify good loan prospects. The program evaluates a property´s appraisal value, location, tenant strength, condition and absorption rate, among other parameters.
In addition, the company intends to finance projects that will allow it to recover its capital even if the developer or owner gets into financial trouble, he said.
By DANIEL MILLER Los Angeles Business Journal Staff
