If you’re a broker working with non-bankable borrowers, you’re going to hear some common objections when trying to sell a small-balance commercial mortgage. Many will initially see the rate as too high, the LTV as too low, or the process as too costly. However, if it’s the only way for them to secure the financing necessary to achieve their goals, you need to help them to understand that.
Here’s how you can overcome common objections and sell the deal:
Manage your borrower’s expectations.
When you’re working with non-bankable borrowers, a good rule of thumb is to under-promise and over-deliver. The last thing you want is for your borrower to expect a bank rate and terms when it’s not something for which they qualify. These expectations will make it harder for you to sell the deal and close the loan, so it’s crucial that you manage them and assure your borrower that you’ll find them the best commercial mortgage for which they can qualify.
Focus on positive aspects of the deal.
Many non-bankable commercial borrowers’ first objections involve their interest rate and the deal’s LTV. Generally, borrowers who need a non-conforming commercial mortgage are going to see higher rates and lower LTV’s, so you should make sure to accentuate the positive. Is the loan going to close quickly? Is your borrower getting a mortgage with fixed and fully-amortizing rate? Did the lender get them a good deal on a commercial appraisal? Focus on these benefits to keep your borrower on track.
Keep your borrower’s eyes on the prize.
One of the best ways to overcome your commercial borrower’s objections is to keep them focused on their goals. If a mortgage from a non-conforming commercial lender is the only way your borrower can secure financing, you need to make sure they understand that it’s the best way to achieve their objective, whether that’s purchasing a new property, paying off credit card debt, or making improvements to their building.
Brokers are going to run into challenges when working with non-bankable borrowers who are seeking commercial financing. In order to succeed, you need to know how to address your borrower’s objections in a way that sells them on the small-balance commercial mortgage they need. Make sure to manage expectations early on, accentuate the positives and keep your borrower focused on what they want to achieve. Taking these steps will make it easier to address your borrower’s concerns, sell the deal and close more commercial mortgages.