As a commercial mortgage broker, you’re likely to come across small business owners having difficulty finding small commercial mortgages from traditional sources. Bank loans can be very difficult for some borrowers to obtain, and many small business owners who can’t get a commercial mortgage from their local bank tend to go the hard money route once they’ve been turned down. However, a small commercial mortgage lender could be a great solution for these borrowers’ financing needs. So, what are the most common reasons that a borrower is non-bankable?
- Tough credit: Although the economy slowly continues to improve, many banks are maintaining a strict policy when it comes to credit. If your borrowers don’t meet their banks’ credit requirements, they’re not going to get a commercial mortgage. That being said, there are small commercial mortgage lenders who will work with borrowers with less than stellar credit. These lenders will listen to borrowers’ stories and work to help them to obtain the small commercial mortgage that they need.
- Time crunch: You might also come across borrowers who do fit within their banks’ requirements, but who need financing quickly. Bank loans take time to underwrite and process because the banks have stricter guidelines. Small commercial mortgage lenders are not bound in the same way and can underwrite and process a deal fairly quickly, getting your borrower the commercial mortgage he or she needs fast.
- Property type: If you’re a broker who does business with borrowers who have small or non-conforming properties, you’ll have a hard time finding those borrowers a bank loan. Banks generally don’t lend on smaller properties or unusual buildings, as they aren’t considered to be profitable or present a risk the banks aren’t willing to take. However, there are small commercial mortgage lenders who are willing to provide mortgages for these types of properties.
If you’re a broker who works with small business owners, these are going to be fairly common issues that your borrowers will encounter when trying to obtain bank financing. For these borrowers, a small commercial mortgage lender that is willing to listen to their story, work with their time constraints and accept their properties as collateral is often the best solution.
Working with a non-bankable borrower? No problem. We have programs for that.