As a small commercial mortgage broker, you’re bound to come across the occasional non-profit organization looking to obtain financing. Religious and charitable organizations, though, often have a tough time acquiring mortgages from traditional lenders. However, there are small commercial mortgage lenders that will lend to these organizations. Here’s the information you need to collect before presenting a non-profit loan scenario to a lender:
- Understand the ownership structure of the organization. In order to take a look at a non-profit loan scenario, your lender will likely require information about the ownership structure of your borrower’s organization, also known as the by-laws. This information is important because the structure will dictate whether or not guarantees are required.
- Get acquainted with the property. Understanding the facts about the building being pledged as collateral is very important to securing your borrower a commercial mortgage loan. How large is the property? What kind of non-profit organization is being run from the building? How many members belong to the organization? If the organization is a church, is the property a traditional church building? These are all important questions to ask your borrower before sending the mortgage request to a small commercial lender.
- Know the organization’s financial situation. All small commercial mortgage lenders are going to want to make sure that a borrower’s finances are in order and that monthly loan payments will be made. Be sure to consult with the lender about the financial documents needed. For example, APEX requires two years of financial statements from non-profit organizations seeking financing, and the financials need to show that the organization has a positive net worth and that it hasn’t lost money in those two years.
- Know your organization’s plans for the money. A small commercial mortgage lender will want to know how your borrower plans to use the mortgage. A detailed use-of-funds will likely be required for commercial mortgages to non-profit organizations. The more information you and your borrower provide the small commercial mortgage lender, the easier it will be to obtain the mortgage.
Providing your small commercial mortgage lender with the above details is very important when working to obtain a commercial mortgage for a non-profit organization. Make sure to include this information when submitting the necessary documents to your lender, and be able to discuss the particulars of the mortgage request. If you’re able to do this, you’ll be better equipped to get your non-profit borrower the small commercial mortgage that they need.