Small Commercial Expert

Dodd-Frank Wall Street Reform Act and the Constriction of Capital

"The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203H.R. 4173) was signed into federal law by President Barack Obama on July 21, 2010.[1] Passed as a response to the late-2000s recession, it brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression.[2][3][4] It made changes in the American financial regulatory environment that affect all federal financial regulatory agencies and almost every part of the nation's financial services industry.[5][6] 

The opening line of the online Wikipedia.org web site about the Dodd-Frank Law meant to reform Wall Street and banking in general is an ominous reminder that laws can have unintended consequences.  While Dodd-Frank was touted as a way to protect the nation against financial firms, it has also caused a Constriction of Capital in the market place.

This constriction of capital has been a harbinger of ill for the struggling commercial real estate market and for the financial institutions looking to liquidate their distressed commercial real estate assets.  Only once in our history since the Great Depression has locating entrepreneurial capital through traditional sources been more difficult than it is today.

However, savvy entrepreneurs in the commercial real estate sector are turning to creative financing solutions.  The creative financing solutions include entrepreneurial capital and structured finance by leveraging non-traditional sources like equity, bridge and mezzanine finance lenders.

Many companies offering structured financing in this market are non-traditional/non-bank lenders also referred to as Investors.  These Investors encompass a cadre of individuals and firm from private wealth and high net worth individuals to Family Offices, hedge funds and REITs.  With the flexibility to spend their money as they see fit and without the burdensome federal regulation experienced by traditional banks, this entrepreneurial capital is able to put together creative financing and structured financing that helps get deals done!

Commercial real estate professionals, bank REO managers, distressed asset managers and entrepreneurial real estate investors can now benefit from partnering with this entrepreneurial capital.  While some see these choices as non-starters because the money is too 'expensive', others have embraced this new source of capital and are acquiring distressed commercial real estate assets at a unbelievably low prices.

When one considers the Cost of Lost Opportunity and the true cost of structured finance, the picture is completely softened.  As is explained in the white paper "Equity and Joint Venture - Understanding the Cost", the cost of entrepreneurial capital in a structured finance format can be completely mitigated by having the ability to make aggressive offers and by being able to move fast to close deals!

While others ponder the cost of this new form of capital and continue to search the barren vaults of more traditional lending sources, many entrepreneurial and aggressive commercial real estate investors are rebuilding their portfolios and their businesses by deploying this capital in a more of a partnership approach rather than the traditional client/lender adversary approach typical to traditional banking models.

To find out more about structured finance, entrepreneurial capital and the use of non-tradional lending in today's complex market contact the structured finance, equity, birdge and mezzanine specialist at Dividend America Commercial Lending.  With one of the most aggressive and diverse lending platforms in today's market, Dividend America gives commercial real estate professionals, bankers, REO managers and distressed asset managers the ability to close deals fast and improve the bottom line.

Contact Michael Gross, President, Dividend America Commercial Lending direct at 404-549-6756 or email to mgross@dividendamerica.com.  Apply online with Easy App and get answers fast.

Structured finance, equity, bridge and mezzanine financing in all 50 states with offices in Atlanta, GA and Scottsdale, AZ.

We will work in any primary market or strong secondary market and especially love these cities:  Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, Fort Lauderdale, Orlando, San Diego, New York, San Francisco, Phoenix, Atlanta, Tampa Bay, Detroit, Minneapolis-Saint Paul, Charlotte, Dallas / Fort Worth, Portland, Seattle, Cleveland, Oklahoma City, Jacksonville, Indianapolis, Nashville, Kansas City, Louisville, Milwaukee, New Orleans, Philadelphia, Raleigh, Sacramento, Salt Lake City, San Antonio, San Jose, Saint Louis, Tucson, Austin, Baltimore.

Comment balloon 0 commentsMichael Gross • November 15 2012 01:43PM
Dodd-Frank Wall Street Reform Act and the Constriction of Capital
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