Short-term lender has a nose for great deals.

Jeffrey Meshel, principal and co-founder of Mercury Capital Corporation, points to the basket of fruit on his desk as a symbol of what sets his lending firm apart from its competitors. "I just started foreclosure proceedings on this guy and he sends me a basket of fruit!" Meshel exclaims. "He understands that we're really in the business of helping people make their real estate deals happen for them, and he knows we bent over backwards going way beyond anything a traditional lender would have done to work things out for him. In the end, we found him a last-minute buyer prior to beginning foreclosing procedures and the owner retained the balance of the equity."

The business to which Meshel refers is providing short-term first mortgages for real estate transactions. The hallmarks of Mercury Capital's niche in this business are first-hand real estate expertise, speed and flexibility.

"Because we understand real estate value, we are able to do all of our due diligence and deliver funds within five days instead of the weeks or months it takes for a commitment from traditional lenders to be funded," explains Marc Gleitman, Mercury's other principal and co-founder. "Our knowledge of real estate also enables us to provide financing for transactions that don't meet traditional lending criteria. We are less rigid about the kinds of transactions we fund because we are secure about the value of the underlying real estate."

Recent Mercury transactions underscore the firm's flexibility. Just last month, Mercury provided a $2.65 million first mortgage for a 158,000 square-foot, Class A-to-B, three-warehouse complex in St. Thomas, US Virgin Islands. The funds enabled the borrower to retire the original debt on the fully-tenanted complex, which he bought back at a discount. Traditional lenders wouldn't have touched the deal because of the risk presented by hurricanes. Mercury funded the deal - in a matter of days - because the real estate involved was more than adequately insured and the value was substantiated by strong income.

In another example, the firm provided a $2 million first mortgage for a well-located, 150,000 square-foot shopping center in Sanford, FL (near Orlando). Despite its location and excellent potential, the property boasted a mere 11 percent occupancy rate and needed funds immediately in order to attract and secure new tenants. Where traditional lenders would have been scared off by the vacancy rate, Mercury recognized the value of the property and knew immediate capital would enable the owner to initiate a complete renovation and accommodate new tenants with superior custom build-outs.

Mercury also provides financing to borrowers who have "insignificant" credit problems such as late credit card balances or unpaid parking tickets, and in instances where the borrowers require debt consolidation, assistance in paying real estate taxes or financing for a mortgage that is in foreclosure. In just about every case, the borrower is unlikely to meet traditional lending criteria.

"Banks got burned badly by real estate in the 1980s and early 1990s, so they are extremely cautious when it comes to real estate leading today," Meshel says. "Even the banks and conduits that call themselves aggressive are hardly able to evaluate and fund a transaction in one week."

"The crux of our business is that we put our money to work for people solving their problems," Gleitman adds. "Generally, because we're dealing with 'problems,' banks won't lend money in these situations. The deals in question are just about always outside their established comfort zones."

Stepping into "discomfort zones" in a mere split-second takes confidence and a strict code of underwriting standards. Mercury, which is privately funded, terms its standards "conservative" and adheres to the following rules to minimize risk: Mercury grants only first mortgages; the total mortgage never exceeds 60 percent of the property's market value; and most mortgages have a term of just one to five years. Mercury investors receive interest rate returns of 10 to 14 percent on the mortgage investment. Another reward is the comfort investors have developed with Mercury's outstanding mortgage servicing capabilities. The firm's state-of-the-art computerized system handles billing and collections, and provides investors with up-to-the-minute information on the status of individual loans and accounts.

Investors and borrowers alike also benefit from Mercury's hands-on involvement in real estate. Gleitman and Meshel, best friends from their undergraduate days at New York University who began investing in real estate together more than a decade ago, are actively acquiring and managing a number of properties in the tri-state region. Most recently, the firm purchased 1274 Fifth Avenue, an historic 55-unit rental residence located between 108th and 109th Streets. Mercury plans an aggressive renovation and leasing program that will enhance the property's long-term value.

"We have a passion for the real estate business, and when we suffered with everyone else during the downturn of the late 1980's, we formed Mercury Capital as a means of remaining active players," Gleitman explains. "When we saw that banks were putting an end to their real estate lending and felt the industry was in turmoil, we saw the opportunity to initiate a short-term lending company that would approach the business with professionalism, integrity and solid real estate experience."

Mercury's first loans were primarily collateralizing single-family dwellings. Over time, as the company's track record grew, the size and nature of its loans expanded as well. Today, the partners review 150 to 200 transactions per week, and count their investors, clients and professional broker contacts at well over 1,000.

"As investors in our own right," we bring a unique comfort level to our lending business that enables us to attract investors and borrowers who want to take advantage of our speed and flexibility," Meshel says. "I think we're a stand-out in this business, and know the market perceives us as such. You've got to admit that when your clients send you presents - even when you're foreclosing on them - you've gotta be doing something right!"