For brokers looking to close more deals and earn additional income, small business owners represent a great opportunity. These individuals need financing for reasons varying from paying off existing debts to making property improvements, and they often need a broker’s help to find the right mortgage for their situation.
If you want to start closing these deals, here’s the information you need to collect from potential borrowers:
Learn about your borrower’s credit history.
One of the most important factors in determining the type of commercial mortgage for which your borrower can qualify is their credit history. Make sure to obtain a recent credit report than includes scores and tradelines, and go over this document with your borrower. If your borrower has experienced issues in the past, make sure you understand the nature of the issues and how your borrower has resolved or is actively resolving them. You’ll need to explain all of this in detail to the commercial mortgage lender.
Gain an understanding of your borrower’s property and business.
Any lender is going to be interested in the nature of your borrower’s commercial building and the type of business they operate. Make sure you include information about what kind of property it is, where it’s located, how large it is, and how the property cash flows. Whether your borrower is running their own business out of the property or simply renting out an investment property, the lender will need to know. This information is critical to the underwriting process.
Find out what their plans for the money are.
In order to lend your borrower money, a lender will need to make sure that the deal makes sense. So, it’s important for you to include information about how your borrower plans to use the funds for their business. Whether they’re planning to make some property improvements, taking advantage of a great deal on inventory, paying off an existing mortgage, or purchasing a new property, it’s important to include this information in your summary of the deal.
Determine that they can repay the mortgage.
The lender needs to know your borrower can make their monthly payments in order to offer them a commercial mortgage. Make sure to collect all relevant documents detailing your borrower’s financial situation and send them to the lender when you submit the deal.
Closing commercial mortgages for small business owners is a great way for brokers to increase their business and their income. To get started, all you need is some basic information about the borrower’s credit history, their property and business, their plans for the money and their capacity to pay. Once you’ve got this information submitted, the lender can guide you through the commercial mortgage process and help you close these deals.