South End Capital

About South End Capital

Founded in 2009, South End Capital is a nationwide, non-conforming lender providing small balance real estate mortgages, subprime SBA loans, and business financing. South End Capital is committed to offering excellent service and innovative financing that is affordable to borrowers. Additionally, the firm provides fee discounts to veterans and first responders.

US Business News, Fit Small Business, Top Ten Reviews and Business.com have recognized South End Capital as one of the premier non-conforming lenders in the country.

Loan Programs

South End Capital offers a few distinct loan programs for business owners and property investors, and concentrates on providing affordable loan terms to borrowers shut-out of conforming financing. The firm’s primary loan offerings are small balance real estate (SBRE) mortgages, subprime SBA financing, and business financing. South End Capital funds its SBRE program directly, but acts as an intermediary for its subprime SBA and business programs.

SBRE Program Highlights / Guidelines

Financing secured by the following property types is available: 1 to 4 unit residential, vacation rentals, multifamily, mixed-use, office, retail, warehouse, industrial, mobile home parks, self-storage, auto-service, auto-dealers, daycare, restaurants, nightclubs, bars, hotels, motels, assisted living, adult living, memory care, rooming houses, sober living houses, rehab houses, church / religious property, and more.

Loan sizes from $175,000 to $5 million (higher case-by-case)

  • Bank statement, stated income and full documentation loans
  • Interest rates start at 5.75%
  • 1, 3, 5, 7 & 30 year fixed loan terms
  • Interest only to 30 year amortizations available
  • No credit score minimum
  • Up to 80% LTV (up to 100% rehab financing available)
  • Foreign national and foreign investor loans
  • Non-profit loans, including for church or religious property
  • Flexible prepayment penalty options
  • Close in 2 to 4 weeks
  • Nationwide program (some restrictions may apply)

Subprime SBA Program Highlights / Guidelines

South End Capital is the industry front-runner in subprime SBA financing, having delivered over $200 million via its innovative program. The company provides streamlined SBA 7(a) and SBA 504 loans to non-conforming business owners turned down by other SBA lenders or banks. The firm offers no collateral loan options, and can provide up to 200% LTV (loan-to-value) in 1st, 2nd or 3rd position on real estate and/or equipment via its SBA 7(a) program. South End Capital also provides SBA 504 financing collateralized by commercial property occupied >/= 51% by the borrower’s business, or when secured by heavy equipment.

In addition to offering SBA financing to borrowers with low credit, lower than normal cash-flow coverage, or past financing barriers, the company is also flexible with its use of proceeds. South End Capital does not cap the working capital it can provide via its SBA 7(a) program, can consolidate merchant cash advances, and also provide renovation, construction and start-up financing.

Loan sizes from $30,000 to $20+ million

  • Quarterly adjustable and fixed rates start at 6.5%
  • 10 and 25 year loan terms and amortizations available
  • Predictable monthly loan payments
  • 550 credit score minimum
  • Up to 200% LTV, and as little as 5% purchase down payment
  • 1 year minimum time in business (tax returns must be filed)
  • Merchant cash advance and debt consolidation financing
  • Business land financing and special-use property considered
  • No collateral options for loans <$500,000 in most cases
  • No prepayment penalty options
  • Nationwide program

Business Financing Program Highlights / Guidelines

South End Capital offers business term loans, credit lines, invoice and equipment financing. The firm requires no credit score minimum, no or limited paperwork, and no real estate or hard collateral — only an active business bank account. Rates start at 0.39% per week or 6.99% per year, there are no out-of-pocket costs, and the firm offers no prepay penalty options. When you apply with South End Capital you can get a credit decision in minutes and funding in as little as 2 hours. Businesses located in the 50 States, Washington D.C., Puerto Rico, U.S. Virgin Islands, Guam, American Samoa and Northern Mariana Islands are considered.

Loan sizes from $1,000 to $500,000 (higher case-by-case)

  • No credit score minimum is required
  • Financing rates start at only 0.39%
  • 12 week to 10 year loan terms are available
  • No lien or UCC filed in most cases
  • No real estate or hard collateral is required
  • There are no restricted industries
  • Weekly and monthly payment options are available
  • There are no set non-sufficient funds (NSF) restrictions
  • Only 1 minimum monthly business bank deposit is required
  • 90+ day minimum time in business (no start-ups)
  • No tax returns or financials required
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The Loan Process

South End Capital focuses on the use of technology in an effort to make its loan process user-friendly, fast and communicative. LendVer was able to shadow the loan process for South End Capital’s SBRE program which it funds directly.

The Application

The online application is easily found on the programs page of the South End Capital website and it will take you only a few minutes to complete. The application is short and concise and does not ask for any personally identifiable information such as a social security number or date of birth, there also is no application fee or other upfront fees required. At the end of the application you will have the option to attach any loan documentation or provide any helpful information that will assist with the review of your request. South End Capital’s application process is secure because its website and loan applications have a security certificate embedded.

After clicking “Submit” you will receive an onscreen notification and an email that your application has been received and will be reviewed promptly. Submitting your application will not affect your credit or cause an inquiry on your credit report. Next, you’ll receive an automated email that your application has been reviewed and more information is needed, underwriting questions will be included in the email which you can respond back to via a secure link.

The Term Sheet

If your application was completed correctly and if you are eligible, you will receive a two-page term sheet to e-sign (often the same day you apply). The term sheet South End Capital provides is easy to read and understand and can be quickly completed and e-signed from your phone or computer. The document outlines the estimated terms of the loan (it is not a loan commitment), what you will be agreeing to, the costs associated with the loan and what to expect next. The second page of the term sheet is a credit authorization form, meaning if you decide to proceed at this point, your credit report will be pulled. However, there are still no fees you have to pay and you will not be obligated to proceed even after signing the term sheet. The term sheet explains that if you do proceed with the firm’s loan, additional underwriting documents will be required, and a subsequent letter of intent (LOI) will be issued if you pass more in-depth underwriting (at which time a $500 deposit will be required).

After you sign and accept the term sheet, you will receive underwriting documentation requests via email to be completed and/or e-signed on your phone or computer as well. Very few documents are required by South End Capital and will include familiar items such as a personal financial statement, a property rent roll (if applicable) and other basic forms.

The Letter of Intent (LOI)

The LOI is more comprehensive than the term sheet, this document spells out your loan terms in detail, enables a title and appraisal to be ordered, includes a supplemental questionnaire and a credit card authorization form to charge you a $500 deposit. You can expect the terms listed on the LOI to be the same as on the previous term sheet, and in addition to a clear title report and a satisfactory appraisal report, there will only be a few outstanding underwriting conditions listed. No tax returns are required if you apply under South End Capital’s stated income or bank statement loan programs. Also, the $500 processing fee is usually waived for veterans and first responders, will be refunded at closing, and South End Capital will usually pay for the appraisal report upfront (a $2,000 to $3,000 cost). You will only be responsible to reimburse the company if your loan closes.

The Closing Process

After you e-sign and return the LOI along with the requested underwriting conditions, you will receive an email from a member of South End Capital’s closing department. Your South End Capital closing contact will order your appraisal and title report, explain the steps ahead and be in touch with any additional questions. You will receive periodic updates while you wait two to three weeks for the appraisal report to come back. Once underwriting is completed and if no issues are uncovered, South End Capital will issue you a loan commitment (there are no additional fees due at this time). The loan commitment is a short two-page document, will outline the same terms that were on the term sheet and the LOI (assuming nothing adverse was uncovered in underwriting), will require you to confirm and agree to the terms listed and that you are prepared to close your loan.

South End Capital’s preferred title company will coordinate a closing date and time that is convenient for you. Closing documents will display South End Capital Corporation as the lender and the $500 deposit you paid when you signed your LOI will be credited back to you. The entire closing process will take less than 30 days if you provide requested documentation in a timely manner.

Pros

  • Low interest rate, low documentation loans starting at 5.75% for non-conforming borrowers.
  • High LTV (loan-to-value) loans up to 80% for commercial property, and 100% rehab financing for investment residential and select property.
  • Various underwriting options are available including stated income, bank statement and full documentation loans.
  • South End Capital offers long-term commercial mortgages fixed for up to 30 years which are very unusual.
  • South End Capital’s loan process is easy and requires minimal documentation.
  • The company has a great industry reputation and has been in business for 10+ years.
  • Most property types are considered including special-purpose commercial real estate such as bars and restaurants which most lenders stay away from.

Cons

  • Automated and email based loan pre-approval process so not much phone interaction with real people in the beginning.
  • Rates for really low credit borrowers (500 to 600 score range), or for South End Capital’s hard money loans are in the 10% to 13% range.
  • South End Capital is a business property and investment property lender, it doesn’t make primary residence loans.

Why South End Capital is the Best

We evaluated many commercial real estate lenders and named South End Capital the Best Commercial Real Estate Lender due to its flexible and innovative programs, its speed of execution and its customer service. South End Capital offers unique products such as a 30-year fixed commercial real estate mortgage, unrestricted cash-out and stated income underwriting for special-purpose property like bars and restaurants.

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