Banker Carroll Penick says refinancing existing deals — not new start-up financing — is the “bread and butter” of his financial institution’s transactions these days.

Penick, Chief Operating Officer and Chief Lending Officer at Delta Trust and Bank, appeared on Talk Business to discuss the current lending environment.

“People are still nervous about the economy. They’re scared to go risk their capital to start something new,” Penick said.

He added that for “qualified borrowers” with higher interest rate loans, refinancing is an attractive option these days.

“It is very much a borrower’s market right now,” said Penick. “Anyone who has an existing loan with any rate above 5 or 6 percent, now’s the time to talk to your banker.”

He said a qualified borrower would be someone who has a low debt-to-income ratio, a higher debt service ratio, and a low loan-to-value on the collateral side.

“If you have those three things, you can probably negotiate the best deal you’ve had in quite awhile,” Penick said.  “The banks are refinancing each other’s loans right now. As we all know, if I don’t take care of my customers, they will go somewhere else.”

To learn more about the dynamics at work in the current lending environment, watch the video below.

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