Once upon a time Bill Badluck borrowed $2 million from a non-prime commercial lender on his office building. His lender was not a commercial bank, a credit union, or even a regular conduit making CMBS loans. Instead his lender was one of these new commercial lenders making non-prime commercial loans, the same kind of sub-prime commercial loans that Bayview Financial used to securitize before the Great Recession. A non-prime commercial loan is a commercial loan offering a long term, a fixed rate higher than a bank but lower than a traditional hard money lender, and an enormous prepayment penalty. These loan requests are less than perfect, perhaps because the property is in asecondary location or because the borrower s credit score is not high enough. Perhaps the tenants in the building are financially weak, like a tanning salon or a nail salon, or perhaps many of the existing leases all mature in the next year or two. If the tenants don t renew their leases, the property could
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