By Daniel Lanyon on Monday 13 June 2016
Commercial property lending firm Liberty SBF has secured $75m in its latest Series B round of funding as it looks to an expansion of its services in the wake of a shake up to the 504 loans market.
Liberty SBF provides short term and permanent financing for owner occupied commercial real estate and in addition provides third party servicing and capital markets services to its bank partners.
Exigent Capital and Mainline Investment Partners were some of the main institutional investors behind the equity raise, with Liberty SBF also expanding credit facilities with Capital One Bank as part of the deal.
A key driver of the Liberty's strategy is to capture what it sees as surging demand from commercial mortgage borrowers hitting the maturity wall due to renewed regulation poised to come into effect.
Congress recently passed legislation to permanently reinstate the SBA 504 Refinance Program, which will when it begins later this month, help to refinance some of the near $1trn in commercial mortgage debt predicted to mature over the next three years. This, the firm argues, will exponentially expand the market for 504 loans in the coming years.
Liberty SBF plans to capture a significant volume of this refinancing wave through its fund raising. It is expecting to originate over $200m across 504 loans in the next 12 months on asset types that range from industrial and self-storage facilities to hotels and other commercial properties, according to Alex Cohen, chief executive officer at Liberty SBF.
"By increasing our already substantial nationwide network we will help serve more small businesses seeking commercial property financing," he said.
By revitalizing and transforming the 504 market, Liberty SBF is filling an exceedingly large void in secondary market lending with its National First Lien SBA 504 Wholesale Program.
Liberty SBF will partner with approved banks, non-bank lenders and other SBA loan intermediaries to originate 504 loans across the country and can pay up to 4 points of premium to its partners.
"We're excited to invest directly in a platform that is revolutionizing the commercial real estate lending business,” said Elie Brender, chief investment officer at Exigent Alternative Capital.
“Liberty SBF's lending focus and existing portfolio presents a compelling opportunity that is consistent with our investment strategy,” he said.