Being turned down by the local bank can be devastating for small business owners seeking commercial mortgages. Whether you directed them to the bank or not, it’s your job as their mortgage broker to find a solution to their financing needs. Fortunately, banks aren’t the only institutions willing to lend to small business owners. Here’s how you can help your borrower obtain the commercial loan they need:

• Research private lenders. When you’re borrower gets turned down by the bank, the first thing you should do is begin researching private lenders. These non-conforming or hard money lenders can offer financing for commercial properties without the same restrictions faced by banks. Find out what kind of information they need to begin the loan process.

• Get to know your borrower’s situation. If you’re working with a borrower who can’t obtain bank financing, it’s important to understand why. Is your borrower still struggling in this recovering economy? Do they have less than stellar credit or tax issues?  Because private mortgage lenders face less regulation than banks, they can work through these issues to get your borrower financing.

• Collect the necessary documents. Once you’ve learned about your borrower’s circumstances, you should gather all of the documents that the lender needs to begin the financing process. Be sure that you and your borrower are able to discuss their financial and credit situation with the lender, as well as what they plan to do with the commercial mortgage.

• Sell the deal. If your borrower was expecting a bank rate and terms, selling a non-conforming commercial mortgage might be difficult. Be sure to sell the positive points of the deal and keep your borrower focused on their business goals.

If you’re working with a borrower who was turned down by a bank, it’s important to help them through the process of finding alternative financing. Finding the right lender for your borrower is key, as is getting to know your borrower. When submitting the deal, be sure you have the necessary documents, and if the lender is willing to loan your borrower the money requested, be sure to sell the deal’s strengths and keep your borrower’s eye on the prize. Being turned down by the bank is a difficult situation, but there are solutions for your borrower.

Are you working with a borrower who was turned down by the local bank? Call APEX at 800-262-2739 or submit your deal here

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