As another year approaches, brokers have another chance to begin closing small-balance commercial mortgages. Whether you’re currently strictly residential or you only handle large-balance commercial deals, the small-balance niche is full of possibilities and opportunities to increase your income.
Why small-balance commercial mortgages?
It’s an underserved market.
There are many commercial borrowers who won’t qualify for bank loans, and they generally don’t know where to turn when they receive a turndown. Your knowledge and experience as a broker are valuable to this group of borrowers.
With the right lender, these loans are simple.
Choosing the lenders you work with is an important part of every broker’s success. When seeking out commercial mortgage lenders, find one whose submission guidelines are simple and who handles the processing for you. This frees up more of your time to drive in new leads.
You can earn more.
Most banks and traditional lenders have fairly low fee caps for brokers. However, when you’re working with non-bankable borrowers, you can earn more. For example, APEX allows brokers to charge up to 5 points up front and earn an additional 2 YSP.
How to find leads
Advertise your services to small business owners.
Individuals who own their own small businesses are going to be the lion’s share of the market for small-balance commercial mortgage. Reach out to these potential borrowers and let them know you can help them find the financing they need.
Let your sources know you can close commercial loans.
Another great way to drive in leads is to let your referral network know that you handle small-balance commercial mortgages. Financial professionals like bankers, accountants and realtors will know borrowers in need of alternative financing sources.
The small-balance commercial mortgage niche is an excellent way for brokers to increase their business in the coming year. Once you let your sources and potential borrowers know that you have the ability to close these loans, this underserved market becomes a simple way for you to earn more.