Although the country’s economic recovery continues to gain strength, there are still small business owners having a tough time obtaining small commercial mortgages. Banks are beginning to lend money to small business owners more often, but there are still some borrowers who are seen as too risky by traditional lenders. Some small business owners simply don’t have time to wait for a bank loan. For these borrowers, hard money loans might be the best option. If you’re a broker looking to do business in this underserved market, read on to see how you can close more hard money loans.
- Know the basics. When you send a loan scenario to a commercial hard money lender, it’s important to understand the basic information about the loan. You’ll need to know what kind of property your borrower has or is looking to purchase, the loan amount the borrower is requesting, and what the borrower is planning to do with the loan.
- The devil’s in the details. You’ve communicated the basics to a commercial hard money lender, and the loan officer you’re working with has expressed an interest in the deal. Now, you need to know the particulars of the loan request. Make sure you can provide the lender with any documentation they require, and be prepared to answer any in-depth questions about the borrower and the loan.
- Be honest and upfront. It’s important to disclose as much information as you can to the lender up front, especially anything that might make the deal difficult. If there’s a major issue, the lender will find it, and you will lose credibility as a commercial broker.
- Offer a helping hand. Commercial hard money lenders are relying on you as a broker to help make the underwriting and closing processes as smooth as possible. Make sure to provide the lender with the information they request, and assist them in communicating effectively with your borrower.
Hard money loans are a viable option for borrowers who are still struggling or who need a loan quickly. The banks will turn these borrowers away, but there are lenders who want this business. If you choose to work with these lenders, make sure you know the details of the loan inside and out, disclose all pertinent information and do everything you can to help ensure a successful closing.
APEX Mortgage Corp. now offers a nationwide hard money loan program and can help borrowers in 42 states obtain the short-term loans they need. For more information about the program, call 877-958-6035.