Commercial Loans

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Commercial Loans

4. COMMERCIAL LOANS

Short Term 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. The loans are principally secured by collateral consisting of real estate and, generally, accompanied by personal guarantees from the principals of the businesses. 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, 2016, we were committed to an additional $4,595,000 in construction loans that can be drawn by the borrower when certain conditions are met.

At September 30, 2016, 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 we may extend the term of the loan beyond one year and reclassify it as part of long term loans receivable. Prior to granting an extension of any loan, we reevaluate the underlying collateral.

Long Term Loans Receivable

Long term loans receivable is comprised of the loans that were extended beyond the original maturity dates, unless it is clear that the loan will be paid back by September 30, 2017. At September 30, 2016, the Company’s loan portfolio consists of $23,314,500 short term loans receivable and $8,217,320 long term loans receivable.

Credit Risk

Credit risk profile based on loan activity as of September 30, 2016 and 2015:

	Developers-Residential		Developers-Commercial		Developers Mixed Use		Total outstanding loans
September 30, 2016	$	28,864,320	$	500,000	$	2,167,500	$	31,531,820
September 30, 2015	$	27,526,540	$	1,000,000	$	617,500	$	29,144,040

At September 30, 2016, the Company’s long term loans receivable includes loans in the amount of $225,000, $725,000 and $3,197,320 originally due in 2013, 2014 and 2015, 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. Accordingly, at September 30, 2016, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof included in operations. Subsequent to September 30, 2016, $1,867,500 of the Company’s long term loans receivable were paid off.