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COMMERCIAL LOANS
 9 Months Ended
Sep. 30, 2021
Receivables [Abstract]  
COMMERCIAL LOANS

4. COMMERCIAL LOANS

 

Loans Receivable

 

The Company offers short-term secured non–banking loans to real estate investors (also known as hard money) to fund their acquisition and construction of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The loans are generally for a term of one year. The short term loans are initially recorded, and carried thereafter, in the financial statements at cost. Most of the loans provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term.

 

At September 30, 2021, the Company was committed to $5,664,928 in construction loans that can be drawn by the borrowers when certain conditions are met.

 

 

At September 30, 2021, no one entity has loans outstanding representing more than 10% of the total balance of the loans outstanding.

 

The Company generally grants loans for a term of one year. When a performing loan reaches its maturity and the borrower requests an extension, the Company may extend the term of the loan beyond one year. Prior to granting an extension of any loan, the Company reevaluates the underlying collateral.

 

Credit Risk

 

Credit risk profile based on loan activity as of September 30, 2021 and December 31, 2020:

 

Performing loans 

Developers-

Residential

  

Developers-

Commercial

  

Developers-

Mixed Used

   Total
outstanding loans		 
September 30, 2021  $45,511,221   $5,819,000   $2,244,000   $53,574,221 
December 31, 2020  $55,119,107   $1,564,863   $1,414,000   $58,097,970 

 

At September 30, 2021, the Company’s loans receivable consisted of loans in the amount of $367,500, $1,052,400, $1,120,000, $2,485,825 and $7,409,749, originally due in 2016, 2017, 2018, 2019 and 2020, respectively. In all instances the borrowers are currently paying their interest and, generally, the Company receives a fee in connection with the extension of the loans. At September 30, 2021, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

 

Subsequent to the balance sheet date, $1,310,000 of the loans receivable at September 30, 2021 were paid off, including $950,000 originally due in 2018.