If you’re a mortgage broker who routinely works with retail borrowers, we’ve got good news for you! Sales improved last month for retail properties, according to an article published last week on Mortgage Professional America’s website. October retail sales excepting automobiles and gasoline increased by 0.5 percent, recovering from the 0.3 percent decrease in September.

Falling gas prices and unemployment rates means that Americans should have more cash in their pockets this holiday season, further brightening the sales outlook.  As retailers prepare for this potential increase, now might be a great time to target retail borrowers looking for a small-balance commercial mortgage. If your borrower is looking for a year-end loan on a retail property, here’s what you need to discuss:

The property:

Your small commercial mortgage lender will need to know what type of retail property your borrower owns. Whether it’s a standalone store or a strip mall, be sure to tell your commercial lender the location, size and approximate value of the collateral.

The business:

Your commercial mortgage lender will need to know if your borrower operates a business out of the property or if they are renting to another retail operation. They’ll also need to know what you or your tenant sells, how the business operates, and the business’s cash flow.

Your borrower’s credit:

Providing your commercial mortgage lender with a recent credit report is a must. It’s also important to discuss any past credit issues with your borrower and to provide a credit explanation if necessary.

The use of funds:

Make sure to explain to your commercial mortgage lender how your borrower plans to use the proceeds to help their business. Whether it’s going to be used to purchase inventory, make improvement to the property or pay off an existing mortgage, your lender will need to know.

The impact on cash flow:

Commercial mortgage lenders always want to be sure the borrower can make their mortgage payments. Be sure to illustrate how this loan will impact your borrower’s cash flow and that they will be able to pay it back.

As the retail sector continues to improve, your borrowers stand a better chance of getting the small-balance commercial mortgages they need. Make sure to discuss the above points with your borrower and lender in order for the process to go smoothly. This will establish you as a credible broker early on, and will increase your chances of closing more commercial mortgages.

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