For many small business owners, owning their building makes life much easier and allows them greater control. Whether a borrower is looking to purchase the building from which they currently do business, a new building to expand their operations or an investment property, it’s important for commercial mortgage brokers to understand what is needed to get the commercial property loan needed. Here’s what’s required to get started:
Your lender will need some basic information about the commercial property your borrower is planning to purchase. It’s important to include the location, the size and the purpose of the property in your description, as well as the purchase price. Photos of the property are also always helpful.
Your borrower’s story will come into play, particularly if you’re working with a small-balance commercial lender. You’ll need to be ready to discuss your borrower’s credit history and have explanations for line items that show delinquencies. It’s also a good idea to prepare your borrower to speak with the lender.
Agreement of Sale:
You may not need to submit this document to get conditional approval from a lender, but the agreement of sale is necessary for the deal to move forward. Send a copy to the lender as soon as possible and be sure it is fully executed by all parties.
Proof of funds:
The lender will need to know that your borrower has the funds for a down payment on the property and will also need to know where that money is coming from. Be sure to send over the relevant financial documents.
Generally, small-balance commercial lenders are interested in a borrower’s plans for the building. Be sure to include what type of business they plan to run from the building or what types of businesses will be renting space.
Purchasing a commercial property is a big step for any small business owner. It’s important for commercial mortgage brokers to have all the necessary information before submitting a scenario to a lender. Be sure to tell your lender about the property itself, your borrower’s story and their plans for the building. It’s also wise to include the agreement of sale and proof of funds. With all of this information at the ready, you’ll make a great impression on your small-balance commercial mortgage lender and have a much better chance of getting your borrower the funds they need.