If you’re a mortgage broker submitting a deal to a small commercial mortgage lender, you generally don’t have to worry about much in the way of documentation. A loan summary, an application and a credit report are usually all that is needed to review a mortgage request. However, there are also five important pieces of information that you need to gather for your small commercial mortgage lender, and you can do it by asking your borrower these five simple questions:
- How will this loan benefit you? Many small commercial mortgage lenders are going to want to know how a loan will help your borrower achieve their goals. Does their building need repairs? Are they paying off a ballooning mortgage? Do they need working capital? Find out, so you can discuss it with the lender.
- How will this loan impact your cash flow? A small commercial lender is going to want to know how this loan will affect your borrower’s current financial situation and if your borrower can make monthly payments. You need to ask your borrower this question and find out if they can demonstrate that they are able to pay the loan back.
- Can you describe your business? Your small commercial mortgage lender will want to know what kind of business your borrower is running and how the business is doing. Ask your borrower to describe their business in detail so that you can discuss it with the lender.
- How is your credit? Discuss with your borrower their personal and business credit history. Make sure you understand any credit issues they’ve had and be able to talk about them with the mortgage lender. You should also prepare your borrower to discuss these issues with the lender.
- What is the collateral worth? Ask your borrower how much they believe the property is worth. Then, ask them if they have any evidence to support the stated claim of value.
If you ask your borrower the above questions before submitting the loan request to a small commercial mortgage lender, chances are the process will go much more smoothly. Your lender will want as much of this information as possible up front so as to make the best possible decision. Providing this information early on will set you apart from other brokers professionally.
To learn more, please view our latest webinar, Commercial Loans 201.