Commercial Loan Refinancing in San Francisco, CA

Maturing loan rescue refinancing is our most urgent refinancing category. Commercial loan balloon payments arrive on fixed dates, and the consequences of missing them — default interest charges, acceleration of the full loan balance, potential foreclosure proceedings — are severe and rapid. When a conventional bank declines to extend a maturing commercial loan because the property's DSCR is below their current floor, the owner's credit profile has changed, or the bank has simply exited the asset class, our bridge refinancing provides same-month resolution. We have closed maturing-loan rescues with as little as ten days to the balloon payment date. The property's equity value supports the refinancing; the conventional underwriting failure is our opportunity.

Cash-out refinancing without seasoning for SF commercial properties that have appreciated is one of our most productive programs for active portfolio investors. An Outer Sunset four-unit building purchased in 2016 for $1.2M that now appraises at $2.2M has $1 million in equity that a conventional lender will not release without twelve months of seasoning, DSCR documentation at market rents, and personal income verification that excludes most self-employed SF investors. We release that equity in ten to fourteen business days at up to 70% of current appraised value, with no seasoning requirement and no income documentation.

Rent-controlled multifamily refinancing is a specialty that combines our SF regulatory knowledge with our asset-based underwriting flexibility. A building with long-term tenants at 50% below market produces conventional DSCR ratios that trigger automatic declines at most banks. We underwrite the current in-place income for current DSCR analysis, then separately model the Costa-Hawkins decontrol trajectory for ten-year income projection, and lend conservatively against current appraised value. The result is a refinancing that conventional banks cannot offer but that accurately reflects the asset's economic reality.

Debt consolidation and capital structure improvement converts multiple high-cost SF commercial loans — including maturing hard money loans, merchant cash advances secured by commercial property, private notes from prior acquisitions, and partnership debt — into a single refinanced loan at a blended rate that is typically lower than the average cost of the consolidated debt. Simplifying a complex capital structure improves cash flow, reduces administrative burden, and often enables the borrower to approach conventional long-term lenders with a cleaner debt picture.

Rescue refinancing from default or pre-foreclosure situations requires moving faster and with more certainty than any other refinancing scenario. When a NOD (Notice of Default) has been recorded, the timeline to trustee sale is fixed and approaching. We evaluate property value, outstanding debt, and borrower equity as the primary underwriting factors, closing in five to ten business days when possible for pre-NOD situations and working with title and trustee contacts to extend timelines when a NOD is already recorded. We have stopped trustee sales on SF commercial properties through same-week closings.

DSCR mismatch between current income and property value is the core structural challenge for SF commercial refinancing. San Francisco's rent ordinance creates a category of properties — pre-1979 residential, mixed-use buildings with residential components — where current income is suppressed by rent control but underlying real estate value is not. A bank applying a 1.25x DSCR minimum to current in-place income on a Mission District eight-unit building will decline to refinance at any rate because the math does not work on current rents. We evaluate the current income for what it is — a floor, not a ceiling — and lend at conservative LTV against current appraised value that appropriately reflects the property's structural rental demand and location quality.

Changed borrower circumstances since original loan origination are among the most common refinancing triggers we see. A divorce settlement affecting personal credit and DTI ratios, a startup failure that created personal credit events, a health situation that reduced documented income — none of these materially affects a fully stabilized SF commercial property's ability to generate rental income and service debt. We underwrite on the property and the current situation, not on the borrower's financial history over the prior seven years.

Lender exit from SF commercial has accelerated as national banks recalibrate geographic exposure and as community banks with SF relationships have consolidated. A borrower whose existing commercial loan is being called by an exiting lender faces a refinancing situation that is not their fault but that requires immediate resolution. We serve as the resolution — paying off the exiting lender and providing hold-period bridge financing while the borrower builds a new permanent lender relationship.

Environmental and title complications on older SF commercial properties can slow refinancing. Phase I environmental reports revealing RECs (recognized environmental conditions) from prior commercial use, title chain gaps in older Victorian commercial buildings, and easement disputes on zero-lot-line properties must be resolved before we fund. Our title team works with SF-specialized underwriters who know the city's parcel history and can clear complications faster than national title teams working from template searches.