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| Commercial Links | Commercial Real Estate Glossary | ||||||||||||||
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Appraisal: A report prepared by a real estate appraiser detailing the analysis of real property which is used to determine the ratio of the loan amount to the fair market value of the property (i.e. the LTV). Debt Service Coverage Ratio (DSCR): All income producing property loans are evaluated in the same manner. The DSCR is the ratio of income to debt service (payment). DSCRs range from a low of 1.20:1 (80% of the Net Operating Income) to 1.40:1 (60% of the Net Operating Income), depending on collateral type. Effective Gross Income: Gross Potential Income, plus other income, minus Vacancy/Collection loss. Environmental Insurance: An insurance policy to protect Pacific Capital Bank from the consequences of possible contamination of the property by Hazardous Substances. This insurance is solely for the benefit and protection of Pacific Capital Bank. Expense Deposit: Upon executing the Letter of Interest, you will be asked to provide Pacific Capital Bank with an Expense Deposit to cover costs of appraisal and credit reports. Prior to funding your loan, you will be presented with a reconciliation of your Expense Deposit and any refund will be made or shortfall will be collected. Current expense deposit schedule is as follows:
Gross Potential Income: Pacific Capital Bank will determine the Gross Potential Income as if the property is 100% occupied. Hazardous Substances: The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. Income from other Sources: Pacific Capital Bank will determine if there is any income from other sources that can also be used for the income stream. Letter of Interest (LOI or Loan Quote): Pacific Capital Bank may issue a letter that articulates the proposed terms and conditions of the loan, loan fees and costs associated with obtaining the loan. This document is not a commitment and is not binding to any party, it is just a reasonable expectation of the anticipated loan terms based upon info provided by the borrower. Loan to Value (LTV): Depending on property type and other variables, Pacific Capital Bank can provide loans up to 75% (80% on multi-family) of the collateral's value. Net Operating Income (NOI): Effective Gross Income minus Stabilized Expenses and Reserves. Reserves for Replacements: An amount determined by Pacific Capital Bank and used to establish Stabilized Operating Expenses including replacement of roof, parking lot, etc. Stabilized Expenses: Amount determined by Pacific Capital Bank as stabilized over a long period of time. Underwriting: This is a combination of disciplines that Pacific Capital Bank employs to determine your loan qualifications. The underwriter will take into consideration the purpose of the loan request, determine your credit worthiness, evaluate the value of the project, age, condition, etc., and Net Operating Income and mix them together to Underwrite your loan. Pacific Capital Bank's Underwriting Teams are experienced real estate professionals, ready to respond to your loan needs. Vacancy/Collection Loss: Pacific Capital Bank will determine the vacancy and collection loss of your project using market data. 
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| Santa Barbara Bank & Trust,
First National Bank of Central California,
South Valley National Bank,
San Benito Bank,
Pacific Capital Bank,
and First Bank of San Luis Obispo
are divisions of Pacific Capital Bank, N.A., member FDIC.
© - Pacific Capital Bank, N.A. All rights reserved. | |||||||||||||||
