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An Alternative to Traditional Lending: Will McCabe Authors Commercial Investment Real Estate Article

After the 2008 financial crisis, traditional lending sources were unable to provide the same loans they had previously made, and as a result, the floodgates opened for nontraditional lending sources that could fill the void.

In his Commercial Investment Real Estate article “Shadow Banking,” Will McCabe, Vice President of Loan Originations at iBorrow, addresses the shadow banking space and the challenges facing the industry.

Unsecured debt is exemplified by the way credit cards work – a borrower can effectively delay repayment obligations for years until the lender files a notice of default, and even then, the disputes are taken to courts where a judge could potentially decide that the lender is not owed the principal balance in full. “While a personal guarantee from the borrower provides some safety for a lender, there is no doubt that it is easier to underwrite the value of real assets, such as real estate, equipment, or inventory, as opposed to gamble on a borrower’s net worth,” writes McCabe.

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