Credit decisions made in Chattanooga by people who will visit the property. Our legal lending limit means we can hold a relationship most community banks in our markets have to participate out, and our size means the credit officer knows your industry rather than a scorecard.
The core of the book. Up to 85% loan-to-value with a 20-year amortization, fixed for five or ten years and then repriced, or swapped to a fixed rate for the full term through our correspondent.
Retail, industrial, office and multifamily in our markets. Up to 75% loan-to-value, minimum debt service coverage of 1.25, recourse unless the sponsor and the property both justify otherwise.
Revolving, secured by accounts receivable and inventory, with a borrowing base certificate due monthly. Annual renewal, and we do expect an annual clean-up period on a seasonal line.
Terms to seven years, matched to the useful life of the equipment rather than to what makes the payment smallest.
Ground-up and renovation, interest only during construction, converting to permanent financing or taking out to a permanent lender at completion. Draws are inspected.
We are a participating lender on both programs. A 504 project pairs our first mortgage with a certified development company debenture in second position, and it is the right structure more often than borrowers expect for owner-occupied real estate with a lower down payment.
Operating lines, equipment, farmland and cold storage. Our Bradley, McMinn and DeKalb county offices have officers who have done this work for twenty years and know what a bad spring looks like on a cash flow statement.
Tax-exempt lease purchase financing for equipment and facilities for cities, counties, utility districts, school systems and 501(c)(3) organizations in our markets.
Standby letters of credit for performance and financial assurance obligations. Issuance fee 1.50% per annum with a $500 minimum, amendment $150.
| Facility | Maximum advance | Amortization | Typical structure |
|---|---|---|---|
| Owner-occupied real estate | 85% of appraised value | Up to 20 years | Fixed 5 or 10 years, then reprice, with a balloon |
| Investor real estate | 75% of the lower of cost or appraised value | Up to 25 years on multifamily, 20 otherwise | Minimum debt service coverage 1.25, personal guaranty from sponsors owning 20% or more |
| Construction | 75% of cost, 70% of stabilized value | Interest only for the construction period | 12 to 18 months, extension available at our option, 10% contingency required in the budget |
| Equipment | 80% of invoice, new; 70%, used | 3 to 7 years | Fixed rate, no balloon |
| Accounts receivable line | 80% of eligible receivables under 90 days | Revolving, 12 month term | Monthly borrowing base, concentration limit of 20% per account debtor unless approved |
| Inventory | 50% of eligible inventory at cost | Revolving | Raw materials and finished goods only. Work in process is not eligible collateral. |
| Farmland | 65% of appraised value | Up to 25 years | Annual or semi-annual payments available to match the crop or livestock cycle |
These are parameters, not commitments, and a specific credit may be approved outside them or declined inside them. The minimum commercial real estate loan we book is $250,000; below that a small business term loan is usually the faster instrument. All credit is subject to approval.
The officers loan committee meets Tuesday at 7:30 a.m. A complete file in credit by the preceding Thursday is generally decisioned that Tuesday. An incomplete file waits a week, which is the entire reason the list above is on this page.
Facilities above the officer committee's authority go to the directors loan committee, which meets on the third Thursday of the month. Plan accordingly on a large request, and tell your relationship manager early if you have a closing date, because there is no way to convene that committee out of cycle for a transaction that could have been submitted two weeks sooner.
| Fee | Fee |
|---|---|
| Loan origination feeOf the committed amount, quoted in the term sheet. SBA loans carry the guaranty fee set by the agency in addition, which we pass through at cost. | 0.75% to 1.25% |
| Commitment fee on an unused lineCalculated on the average unused portion and billed quarterly in arrears. Not charged on a line under $250,000. | 0.25% per annum |
| Annual review and renewal feeCharged on a revolving line at each annual renewal. Waived in the year the line is originated. | $350.00 |
| Documentation preparationHigher where outside counsel prepares the loan documents, which is the case on a participation, a multi-property collateral package or any facility above $5,000,000. | $475.00 |
| Commercial appraisalOrdered by us from a state-certified general appraiser on our approved list. You cannot supply your own. Complex property types and anything requiring an income approach with limited comparable data sit at the top of the range and take four to six weeks. | $2,400.00 to $6,500.00 |
| Appraisal review, where required | $500.00 |
| Environmental record search | $425.00 |
| Phase I environmental site assessmentRequired on most non-residential real property collateral. A Phase II, where the Phase I recommends one, is scoped and quoted separately and is not cheap. | $2,800.00 |
| Flood determination with life-of-loan tracking | $18.50 |
| Title insurance and recordingSet by the title company and the county register. Tennessee recordation tax on indebtedness is $0.115 per $100.00. | Varies |
| UCC filing and search, per state | $85.00 |
| Construction draw inspection, each | $225.00 |
| Loan modification or extensionOr 0.25% of the outstanding balance, whichever is greater, on a facility above $2,000,000. | $750.00 |
| PrepaymentOn a fixed rate term loan: 3% of the amount prepaid in year one, 2% in year two, 1% in year three, none after. A swapped facility carries the breakage cost of the swap instead, which can be materially larger and is quoted by our correspondent at the time of prepayment. | Step-down |
| Late chargeAfter the 10th day. Your note governs. | 5.00% of the payment |
Requests under $250,000 for an established business are handled by the small business team rather than by a commercial relationship manager, with a shorter document list and a faster decision, generally within five business days of a complete application. Ask any office, or call (423) 555-0106. Applications for credit are subject to the Equal Credit Opportunity Act: we do not discriminate on any prohibited basis, and if we decline your request you are entitled to a statement of the specific reasons on request within 60 days.