In the world of commercial mortgages, there are many small business owners who cannot qualify for bank financing. This under served niche of borrowers who fall between the bank and hard money offers brokers looking to earn more a great opportunity to do so. In order to take advantage of this, you need to be able to spot a non-bankable borrower and understand how to help them secure financing.
First, you need to understand what makes someone a non-bankable borrower.
Lower credit scores:
If your borrower’s scores indicate past credit issues, they probably won’t qualify for bank financing. When this is the case, you’ll need to find a lender willing to listen to your borrower’s story.
Small property or loan size:
More often than not, commercial borrowers seeking small-balance loans on smaller properties or unusual property types will be unable to qualify for a bank loan. In order to serve these borrowers, you need a lender that specializes in small-balance commercial mortgages.
Tax debt or income verification issues:
If your borrower needs to pay off tax liens or is unable to verify their income through tax returns, a bank loan will be out of reach. In this situation, a lender who takes a stated income approach is a good solution.
Quick turnaround time needed:
Borrowers who need funds fast are generally going to be out of luck when applying for a bank loan, as those take longer to close because of tighter regulations. Non-conforming lenders, on the other hand, can often close loans in a matter of weeks if needed.
So, how can you help non-bankable borrowers find the financing they need?
Take the above issues into account, and make a connection with a non-conforming lender who specializes in small-balance commercial mortgages. These lenders see borrowers as more than a number and offer common-sense approach to lending, which allows for more flexibility for borrowers who have tax or income verification problems. Additionally, non-conforming lenders can get your non-bankable borrower the funds they need quickly, which means you’ll get your commission check that much faster.