Manhattan Bridge Capital, Inc. (LOAN): Business Model Canvas [10-2024 Updated]
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Manhattan Bridge Capital, Inc. (LOAN) Bundle
Understanding the business model of Manhattan Bridge Capital, Inc. (LOAN) reveals how this company thrives in the competitive real estate financing landscape. With a strong focus on short-term secured loans and a commitment to tailored solutions for borrowers, Manhattan Bridge Capital combines strategic partnerships and an experienced management team to deliver exceptional value. Dive deeper into the intricate components of their business model, from key partnerships and activities to revenue streams and customer segments, to see how they navigate the complexities of the market.
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Key Partnerships
Collaborations with banks and brokers
Manhattan Bridge Capital, Inc. has established significant partnerships with banks and brokers, which are crucial for its loan origination process. The company has a credit line with Webster Business Credit Corporation, Flushing Bank, and Mizrahi Tefahot Bank Ltd, collectively referred to as the "Lenders". As of September 30, 2024, the Webster Credit Line provides a credit facility of $32.5 million, secured by assignments of mortgages and other collateral.
The interest rates on this credit line are based on the Secured Overnight Financing Rate (SOFR) plus a premium, which was approximately 8.4% as of the same date. The partnerships with these banks not only facilitate funding but also ensure compliance with various financial covenants essential for maintaining operational liquidity.
Relationships with independent legal counsel
Independent legal counsel plays a vital role in Manhattan Bridge Capital's operations. The company relies on these legal experts to verify titles, ownership, and to file necessary liens associated with their loan transactions. This is crucial for maintaining the integrity and legality of the loans issued. For the nine months ended September 30, 2024, general and administrative expenses, which include legal fees, were approximately $1,225,041, a slight decrease from $1,274,267 in the same period in 2023.
Utilization of external appraisers
External appraisers are utilized by Manhattan Bridge Capital to evaluate the worth of collateral for the loans granted. This practice is essential for risk management, ensuring that the loans are adequately secured. As of September 30, 2024, the total outstanding loans receivable amounted to approximately $68.71 million, which includes a diverse portfolio of residential, commercial, and mixed-use developments.
The company has consistently reported no loan impairments, indicating that their appraisal processes are effective in assessing the value of collateral.
Partnerships with construction inspectors
Manhattan Bridge Capital also partners with construction inspectors to evaluate the progress and quality of construction projects financed through their loans. This partnership is critical for mitigating risks associated with the construction phase of funded projects. As of September 30, 2024, the company had committed approximately $8,147,338 in construction loans that can be drawn by borrowers when certain conditions are met.
This proactive approach not only helps in monitoring the construction activities but also ensures that funds are released appropriately based on the project's progress, thereby safeguarding the company's investment.
| Partnership Type | Description | Financial Impact |
|---|---|---|
| Banks and Brokers | Credit line with Webster and other banks | $32.5 million credit line, interest rate ~8.4% |
| Legal Counsel | Verification of titles and ownership | General administrative expenses: $1,225,041 |
| External Appraisers | Assessment of collateral value | Total loans receivable: $68.71 million |
| Construction Inspectors | Monitoring of construction projects | Committed construction loans: $8,147,338 |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Key Activities
Origination of short-term secured loans
Manhattan Bridge Capital, Inc. specializes in the origination of short-term secured loans primarily aimed at real estate investors. For the nine months ended September 30, 2024, the company issued approximately $29,362,922 in loans, compared to $40,810,565 in the same period of 2023. The loans are secured by first mortgages on residential and commercial real estate within the New York metropolitan area, New Jersey, Connecticut, and Florida.
Management of loan portfolio
The management of the loan portfolio is crucial for ensuring the stability and profitability of the company. As of September 30, 2024, the total outstanding loans were approximately $68,711,438, a decrease from $73,048,403 at the end of 2023. The portfolio consists of performing loans, including $59,886,438 from residential developers, $7,380,000 from commercial developers, and $1,445,000 from mixed-use developers. The company's strategy includes careful monitoring and reevaluation of collateral, especially when loans reach maturity.
Conducting credit risk assessments
Credit risk assessments are integral to Manhattan Bridge Capital's operations. The company has maintained a strong credit profile, with no loan impairments reported as of September 30, 2024. The company conducts thorough evaluations before approving loans, ensuring that borrowers have signed extension agreements or are in the process of doing so. This careful approach helps mitigate potential defaults and enhances the overall quality of the loan portfolio.
Marketing and business development efforts
Marketing and business development are essential for attracting new clients and retaining existing ones. The company relies on repeat business from prior customers, referrals, and leads from banks and brokers. In addition, the Chief Executive Officer dedicates significant time to business development. For the nine months ended September 30, 2024, general and administrative expenses, which include marketing efforts, totaled approximately $1,225,041, a decrease from $1,274,267 in the same period of 2023.
| Activity | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Loans Issued | $29,362,922 | $40,810,565 |
| Total Outstanding Loans | $68,711,438 | $73,048,403 |
| General and Administrative Expenses | $1,225,041 | $1,274,267 |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Key Resources
Loan portfolio secured by real estate
As of September 30, 2024, Manhattan Bridge Capital, Inc. had a total loan portfolio amounting to approximately $68,711,438. This portfolio is primarily composed of performing loans, including:
| Loan Type | Amount |
|---|---|
| Residential Developers | $59,886,438 |
| Commercial Developers | $7,380,000 |
| Mixed-Use Developers | $1,445,000 |
The loans are typically secured by real estate and personal guarantees from the principals of the borrowers. The company has maintained a strong performance record, with no loans being classified as non-collectible as of the reporting date.
Experienced management team
The management team at Manhattan Bridge Capital, Inc. boasts extensive experience in real estate financing and investment. The CEO, Assaf Ran, has been instrumental in driving the company’s strategic direction and business development efforts. The company relies on its skilled workforce to evaluate loan applications, manage the loan portfolio, and ensure compliance with regulatory requirements.
As of September 30, 2024, the company reported a net income of approximately $4,284,550, representing a 3.8% increase compared to the prior year, highlighting the effectiveness of its management strategies.
Access to the Webster Credit Line
Manhattan Bridge Capital, Inc. has a credit line with Webster Business Credit Corporation, which provides a maximum credit facility of $32.5 million. As of September 30, 2024, the outstanding amount under this line was approximately $19,170,268, with an interest rate of approximately 8.4%, inclusive of a 0.5% agency fee. The credit line is secured by assignments of mortgages and other collateral.
Established brand reputation in real estate financing
Manhattan Bridge Capital, Inc. has developed a strong brand reputation within the real estate financing sector, particularly in the New York metropolitan area. The company has established itself as a reliable source of financing for real estate investors, primarily through repeat business and referrals from satisfied customers. For the nine months ended September 30, 2024, the company reported total revenues of approximately $7,330,000, up from $7,231,000 in the previous year.
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Value Propositions
Flexible loan structures tailored to borrower needs
Manhattan Bridge Capital, Inc. offers a variety of short-term secured loans, primarily known as hard money loans, which are designed to meet the specific needs of real estate investors. These loans are typically structured to allow for interest-only payments during the term, with a balloon payment at the end. The loans are generally for a term of one year, with the possibility of extensions depending on the borrower's needs and the evaluation of the underlying collateral.
As of September 30, 2024, the company was committed to $8,147,338 in construction loans that can be drawn by borrowers when certain conditions are met .
Quick loan processing times
Manhattan Bridge Capital prides itself on its ability to process loans quickly, which is essential for real estate investors who need immediate funding to secure properties. The company has established efficient operational procedures to minimize the time from application to funding, allowing borrowers to capitalize on time-sensitive opportunities in the real estate market.
In the nine months ended September 30, 2024, total revenues amounted to approximately $7,330,000, reflecting the impact of higher interest rates on commercial loans, which contribute to the company's ability to offer quick financing.
Attractive risk-adjusted returns for investors
Investors in Manhattan Bridge Capital benefit from attractive risk-adjusted returns, primarily through interest income generated from secured commercial loans. For the nine months ended September 30, 2024, the company reported interest income of approximately $6,128,000, which was a notable increase from $5,889,000 in the same period of the previous year .
The company maintains a strong focus on ensuring that its loans are backed by real estate collateral and personal guarantees from borrowers, which significantly mitigates risk. The average interest rates charged on loans, as of September 30, 2024, were approximately 8.4%, which includes a 0.5% agency fee .
Strong focus on the New York metropolitan area real estate market
Manhattan Bridge Capital specializes in providing loans within the New York metropolitan area, including New Jersey and Connecticut. This focus enables the company to leverage its in-depth knowledge of the local real estate market, thereby offering tailored solutions that address the unique challenges faced by investors in this region.
As of September 30, 2024, the company's portfolio included performing loans totaling approximately $68,711,438 across residential, commercial, and mixed-use developments . This concentration allows the company to effectively manage risk while maximizing opportunities in a diverse range of real estate projects.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenues | $7,330,000 | $7,231,000 |
| Interest Income | $6,128,000 | $5,889,000 |
| Origination Fees | $1,201,000 | $1,342,000 |
| Loans Receivable | $68,711,438 | $73,048,403 |
| Construction Loans Committed | $8,147,338 | N/A |
| Average Interest Rate on Loans | 8.4% | N/A |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Customer Relationships
Personalized service and support for borrowers
Manhattan Bridge Capital, Inc. (LOAN) emphasizes personalized service in its interactions with borrowers. The company offers short-term secured loans primarily to real estate investors in the New York metropolitan area. These loans are typically secured by real estate and personal guarantees from the borrowers. As of September 30, 2024, the total loans receivable amounted to approximately $68.7 million, with a significant portion attributed to personalized lending solutions tailored to individual borrower needs.
Building loyalty through repeat business
The company enjoys a strong base of repeat customers, which is crucial for its business model. For the nine months ended September 30, 2024, approximately $29.36 million was lent out, a decrease from $40.81 million in the same period in 2023, indicating a reliance on established relationships for ongoing business. Repeat business is a cornerstone of LOAN's strategy, as satisfied clients often return for additional financing needs.
Regular communication regarding loan status
Regular communication is integral to maintaining customer relationships. The company actively updates borrowers on their loan status, enhancing transparency. This practice not only fosters trust but also aids in managing expectations, especially as the company extends loan terms when necessary. For the nine months ended September 30, 2024, interest income from loans was approximately $6.13 million, reflecting the ongoing engagement with borrowers.
Engagement through referrals from satisfied clients
Referrals from satisfied clients significantly contribute to LOAN's business development. The company has built a reputation that encourages existing clients to refer new business. This referral network has been a consistent source of new transactions, with approximately $33.75 million collected from borrowers during the nine months ended September 30, 2024. The strategy of leveraging customer satisfaction to generate referrals is a vital component of maintaining growth.
| Metric | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Total Loans Receivable | $68,711,438 | $73,048,403 | -5.1% |
| Total Amount Lent | $29,362,922 | $40,810,565 | -28.0% |
| Interest Income from Loans | $6,128,131 | $5,888,843 | +4.1% |
| Total Collections from Loans | $33,749,887 | $44,512,989 | -24.3% |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Channels
Direct outreach to real estate investors
Manhattan Bridge Capital, Inc. engages in direct outreach to real estate investors, leveraging a network of existing client relationships. This approach has been crucial in maintaining a steady flow of business, with repeat transactions from prior customers forming a significant part of their revenue stream.
Networking through industry events and referrals
The company actively participates in industry events, which serves as a platform for networking and establishing relationships with potential clients. Referrals from banks and brokers also contribute to new business opportunities. For the nine months ended September 30, 2024, it was reported that a total of $29,362,922 was lent, demonstrating the effectiveness of these networking efforts.
Online presence for lead generation
Manhattan Bridge Capital maintains an online presence designed for lead generation. This includes a professional website and digital marketing strategies aimed at attracting new clients. The company utilizes its platform to provide information on its loan offerings, thereby enhancing visibility and accessibility for potential borrowers.
Advertising in targeted real estate platforms
Advertising efforts are concentrated on targeted real estate platforms. This strategic approach allows the company to reach a specific audience interested in real estate investments. The advertising strategy complements their direct outreach and networking efforts, thereby expanding their market reach.
| Channel | Description | Impact on Revenue |
|---|---|---|
| Direct Outreach | Engagement with existing clients and potential investors. | Significant repeat business contributing to total revenues of approximately $7,330,000 for the nine months ended September 30, 2024. |
| Networking Events | Participation in industry events for relationship building. | Facilitated lending of $29,362,922 during the same period, demonstrating effective client acquisition. |
| Online Presence | Utilization of a professional website for lead generation. | Enhanced visibility leading to increased inquiries and potential loans. |
| Targeted Advertising | Advertising on real estate platforms to attract investors. | Broadened market reach, supporting overall loan origination efforts. |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Customer Segments
Real estate developers (residential and commercial)
Manhattan Bridge Capital primarily serves real estate developers, focusing on both residential and commercial sectors. The company has extended loans totaling approximately $68,711,438 as of September 30, 2024, which includes:
- Residential Developers: $59,886,438
- Commercial Developers: $7,380,000
- Mixed-Use Developers: $1,445,000
This diverse clientele allows the company to maintain a balanced portfolio and capitalize on various market opportunities.
Investors seeking quick financing solutions
Investors looking for quick financing solutions represent another significant customer segment for Manhattan Bridge Capital. The company specializes in short-term, secured loans, offering a streamlined process for obtaining financing. In the nine months ended September 30, 2024, Manhattan Bridge Capital lent approximately $29,362,922 under its commercial loans, providing timely financial support to investors in need of quick capital for property acquisitions or developments.
Property owners in need of construction loans
Property owners requiring construction loans form a crucial segment of Manhattan Bridge Capital's customer base. The firm is committed to $8,147,338 in construction loans that can be drawn when certain conditions are met. This flexibility in loan disbursement is essential for property owners who need access to funds to initiate or complete construction projects.
Repeat customers and referrals from existing clients
Repeat business and referrals from existing clients play a vital role in Manhattan Bridge Capital's growth strategy. The company has noted that a significant portion of its new transactions arises from previous customers and their recommendations. This relationship-driven model has proven effective, as it fosters trust and reliability within the real estate community, ensuring a steady flow of new business opportunities.
| Customer Segment | Amount Lent (as of September 30, 2024) | Key Characteristics |
|---|---|---|
| Real Estate Developers | $68,711,438 | Both residential and commercial projects |
| Investors | $29,362,922 (for nine months ended September 30, 2024) | Quick financing needs for acquisitions |
| Property Owners | $8,147,338 (committed for construction loans) | Need access to construction funds |
| Repeat Customers | Significant portion of new transactions | Trust and reliability within the community |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Cost Structure
Interest expenses on borrowed funds
For the nine months ended September 30, 2024, interest and amortization of deferred financing costs were approximately $1,831,000, compared to approximately $1,856,000 for the same period in 2023, indicating a decrease of $25,000 or 1.3%. For the three months ended September 30, 2024, this expense was approximately $537,000, down from $614,000 for the same period in 2023, a decrease of $77,000 or 12.5%.
General and administrative costs
General and administrative expenses for the nine months ended September 30, 2024 totaled approximately $1,225,000, a decrease from approximately $1,274,000 for the same period in 2023, reflecting a reduction of $49,000 or 3.8%. In the third quarter of 2024, these expenses were approximately $380,000, compared to $377,000 in 2023, showing a slight increase of $3,000.
Marketing and business development expenses
Marketing and business development expenses have seen fluctuations, with reductions noted in 2024 compared to the previous year. Although specific figures for marketing expenditures are not detailed, the overall general and administrative costs indicate a decrease in marketing-related spending.
Legal and appraisal fees for loan transactions
Legal and appraisal fees are incurred as part of the loan transaction process, although precise figures are not explicitly detailed in the financial statements. These costs are typically variable and dependent on the volume of transactions processed. The overall trend indicates a focus on maintaining efficiency in these expenditures as part of the general and administrative costs.
| Cost Category | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Interest Expenses | $537,000 | $614,000 | $1,831,000 | $1,856,000 |
| General and Administrative Costs | $380,000 | $377,000 | $1,225,000 | $1,274,000 |
| Marketing Expenses | Not Specified | Not Specified | Declined | Declined |
| Legal and Appraisal Fees | Not Specified | Not Specified | Variable | Variable |
Manhattan Bridge Capital, Inc. (LOAN) - Business Model: Revenue Streams
Interest income from loans issued
For the nine months ended September 30, 2024, Manhattan Bridge Capital, Inc. reported interest income from loans of approximately $6,128,131, compared to $5,888,843 for the same period in 2023. This reflects an increase attributed to higher interest rates on commercial loans
.Origination fees on new loans
Origination fees generated for the nine months ended September 30, 2024 were approximately $1,201,494, a decrease from $1,342,077 in the prior year. This decline is linked to a slowdown in new loan originations during the same period.
Fees for loan extensions and renewals
The company earns additional revenue through fees for extending the terms of existing loans. These fees are typically assessed when a borrower requests an extension beyond the original one-year term. The specific revenue from these fees is included within the broader interest income and origination fees; however, the overall collection of fees remains consistent with borrowers' requests for loan renewals.
Potential income from investments in mortgage-backed securities
Manhattan Bridge Capital, Inc. also invests in mortgage-backed securities, which can contribute to its revenue streams. As of September 30, 2024, the company had outstanding senior secured notes amounting to $6,000,000, maturing on April 22, 2026, which accrue interest at a rate of 6% per annum. Such investments are secured by a first priority lien on all of MBC Funding II's assets.
| Revenue Stream | 9 Months Ended September 30, 2024 | 9 Months Ended September 30, 2023 |
|---|---|---|
| Interest Income from Loans | $6,128,131 | $5,888,843 |
| Origination Fees | $1,201,494 | $1,342,077 |
| Fees for Loan Extensions/Renewals | Not Specified | Not Specified |
| Investments in Mortgage-Backed Securities | $6,000,000 (Senior Secured Notes) | $6,000,000 (Senior Secured Notes) |
Article updated on 8 Nov 2024
Resources:
- Manhattan Bridge Capital, Inc. (LOAN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Manhattan Bridge Capital, Inc. (LOAN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Manhattan Bridge Capital, Inc. (LOAN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.