Commercial Mortgages for Small Businesses are a notably animal than Residential Mortgages.  Commercial Mortgages are based on three main criteria but there are many variables that can make those criteria flex based on the lender and their goals.  Yes… the Lender’s goals.

In Residential Finance, my goal is to take the borrower’s unique needs and match one of the thousands of Loan Programs

from the hundreds of lenders to those unique needs.  There can be many lenders that have the program that fit the borrower’s needs so then the decision is based on rate and terms.  Most of this can be found out on a printed rate sheet or on a Lender’s website and pricing database engine. 

Commercial Mortgages are a little more complicated for the Lender and the Mortgage Broker.  Each lender prefers a different type of borrower, property and situation.  This means that much of their decision making is subjective.

Yes… sometimes decisions are made by whether the bank brass like the property, the borrower or even the story behind it. 

Lenders have all sorts of criteria by which they qualify businesses and individuals for a commercial loan… but a borrower can be denied for a loan simply because someone on the loan committee does not like something about the whole deal.

Needless to say, I make it my business to know where a potential borrower might fit.  What lenders work what niches; what lenders are just not good with certain property types and where is the borrower going to be happiest with the relationship that is created.

Thus far I have really commented on brokering loans with a bank… there are lenders out there too.  Lenders that have wholesale relationships with brokers like me.  These lenders have an array of products that often fit the borrowers that banks want to ignore.

Lenders do well with the average borrower, too… but they are great with the low down payment borrowers, the marginal credit borrowers, and the borrowers who are newest to their business so they don’t have established cash flows just yet.

Big Banks want proven revenue – and lots of it.  Many won’t even consider a loan fro a business with under $5Million in annual revenue – a tough number for many small businesses.

This is why it is important to understand the niche lenders, business banks and boutique banks in the market.   I have a list of over 100 lenders that I can call for basically any unique client.  They range from Conduit Lenders to Hard Equity lenders to private investors. 

Working with a Commercial Mortgage Brokers opens up the opportunity for  a small business to keep working on improving those revenues while there is someone working on their team to help them find the best lending relationship for them. 

If you are considering a purchase of Commercial Real Estate, call a Mortgage Broker that is comfortable and confident in commercial finance to help your business grow to the next level.

My Commercial Mortgage motto is:

“I like helping Small Businesses become Big Businesses”.