LOS ANGELES-Now that the recession is coming to an end, real estate sponsors are becoming more active. The challenge, however, is that many, if not most, of these sponsors had difficult lending issues during the recession which negatively affected their credit. As a commercial real estate loan broker for almost 30 years, I am regularly asked how to get new loans approved for these “credit impacted” sponsors.

To answer this, we must first identify the sponsor's response to his lending issues. There were three main types of sponsors' reactions, including:

• Those who had the means and chose to repay all debts to maintain their credit
• Those who walked from bad deals with non-recourse loans without putting up a fight
• Those who fought with lenders to save as much of their net worth as possible, contrary to the lenders' contractual rights.

Of course, lenders love to do business with the first group of borrowers who repaid their debts, even by adding new equity. They also have no problem at all dealing with the second group of sponsors, those who walked away without a fight; “giving the keys” to the lender, either through a deed in lieu or a pre-negotiated foreclosure.

The third type of sponsor is more difficult to finance and will be discussed below.