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The Benefits of Knowing Your Commercial Mortgage Borrowers

In order to properly present a small-balance commercial deal to a lender, brokers need to get to know their borrowers.  Taking the time to learn about your borrower and their business will make it easier to place the deal with the right lender and to close the deal quickly and without issue.  The more you know ahead of time, the better off you’ll be.

Here are a few things to discuss with your borrower to make the process easier:

Pull their credit report and discuss it with them.

Every lender will need a recent copy of your borrower’s credit report, complete with scores and tradelines, in order to properly evaluate a small-balance commercial mortgage request. Before submitting the deal to any lender, review your borrower’s credit report, discuss it with them and be prepared to explain any past financial bumps to the lender.

Ask them about their property.

Your borrower’s collateral is another component in obtaining a small-balance commercial mortgage. Ask your borrower where the property is located, how large the property is and what type of business operates out of the building. Also, provide the lender with exterior and interior photos of the property.

Find out how long they’ve been in business.

Lenders will want to know that your borrowers is invested in and committed to their enterprise, so it’s always a good idea to ask how long your borrower has been in business. The more experience they have, the more willing a lender will be to provide them with a small-balance commercial mortgage.

Learn about their plans for the money.

Whether your borrower is looking to consolidate their debt, make some small improvements to their building or purchase a new property, a lender will want to know the details. Be sure to discuss this with your borrower and include their plans for the money in your summary of the deal.

Collect relevant financial information.

A lender will need to know that your borrower can make their monthly payments. Make sure to provide them with the financial information that proves they have the capacity to pay.

Again, getting to know your borrower makes placing and closing the loan much simpler. In order to make sure the deal is approved, underwritten and processed quickly, you should learn as much as you can about your borrower, their financial situation and their property before submitting it. Discuss their plans for the money, how the loan will benefit their business and their ability to repay the loan, as well. Learning all of this information ahead of time will ensure smoother sailing and more closed loans.

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