Commercial Borrowers – Be Prepared & Communicative

Experienced borrowers already know this, however if you are an occasional, or new, commercial borrower, the following will save you much valuable time and frustration while vastly improving your chances for a successful commercial funding.

In this example, we will assume you need a commercial mortgage, whether for a purchase, a rate and term refinance or a cash out refinance, please be prepared as follows:

Obtain a Tri-Merge Credit Report or call us for a free one.

Prepare an up to date Personal Financial Statement. Be honest; include the good, bad and the ugly, if applicable.

Have copies of the last 2 years Corporate and Personal Tax Returns available.

Have a YTD P & L and Balance Sheet at the ready, either yours or the Seller's, if purchasing.

Have yours, or the Seller's, Rent Roll and property expenses up to date and accurate.

*Have a two paragraph Executive Summary, if only in your head, ready to communicate your goals, needs and expectations.

Don't ask for, or expect, an interest rate "Quote" in the first conversation!

*Every commercial deal is as unique as the people that operate the underlying business. Please understand when you are dealing with a professional commercial loan broker, he/she can normally ascertain whether your plan is doable very quickly, but only if you can clearly communicate what it is you are attempting to accomplish and describe in detail the commercial property that is the subject of the loan.

It is to your advantage to use your commercial broker wisely for knowledge, thus perhaps saving yourself valuable time hoping to do a deal that may not be doable due to market conditions or the uniqueness of the property, or both.

If you do the above and the good news is:

If you are prepared, and communicative, the chances are that we can do some preliminary underwriting on your loan request, find the proper lender in your circumstances and in 24 to 48 hours get back to you with a written "Term Sheet" (Loan Commitment) to do your loan within your time frame to close!

Your "Term Sheet" will contain all the pertinent information such as rate, term, monthly payment and terms and conditions for you to make an intelligent and informed decision of whether the Lender's offer meets your ROI needs and bottom line expectations. 

By following this simple preparedness formula, you put yourself in the driver's seat to get your deal done quickly and with the least frustration.

To be ill prepared is a dis-service to your own business and to us whose only mission is to see you obtain the loan you desire.

Understand that the first preliminary underwriting may show weaknesses in your plan or loan request that will preclude us from obtaining a Term Sheet for you. By being prepared as outlined above, your information may very well lead us to suggestions to improve your plan and/or package to be acceptable so a loan commitment can become available.

It is far better to learn correctable bad news from us first than to waste months shopping a loan that is fatally flawed from the git go.

Here is another link to get you started learning more about commercial financing:

Commercial Mortgage Borrowers Handbook - Lesson # 1


Are your credit Score(s) under 680?

As on the Residential side, Commercial Lenders have tightened their credit score requirements, as have the Credit Bureaus! If you last pulled your credit a year ago, you may find your score(s) now have tailed off a little.

To help you cope with this trend, my credit provider, Funding Suite, has initiated a new helpful service (Avail) for those who are on the cusp credit wise. This service coaches you on numerous subtle ways to manage your credit to improve your profile with the Credit Bureaus.  It's sort of an insiders view on how minor changes to your credit profile can increase your scores, just by knowing what the Credit Bureaus like to see, -- or not.

This service is not a quick fix, but over 6 months to a year, if you follow the advice, you could see your scores increase 25 to 75 points. Its worth a look if your present scores are under 680.

                       Commercial Mortgage Credit Coaching - Learn More