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Educational articles for Commercial Mortgage Brokers

Advantages of Working with a Non-Traditional Commercial Mortgage Lender

Passing up on commercial property owners in need of financing is passing up on additional income. When a client has been turned down by their bank and they come to you for help financing their building you need to know what to do.  While it might seem like getting these borrowers the loans they need is going to be a serious challenge, the fact of the matter is that there are plenty of lenders who specialize in financing for those turned away by the banks. The same skills apply when working with a non-bank lender as apply when working with any residential mortgage company or traditional bank, and usually, there’s less paperwork and fewer headaches involved. Here’s why you should start working with a private commercial mortgage lender now:

  • Appetite for risk:

    If some of your borrowers are unable to qualify for bank financing, a non-traditional commercial mortgage lender is going to be a great asset. These lenders are willing to loan money to borrowers with less than perfect credit and will listen to your borrowers’ stories. To this kind of lender, your borrower is more than a credit score; they’re a small-business owner who needs financing.

  • Shorter turnaround times:

    Bank loans can take months to close, and if your borrower is dealing with a time-is-of-the-essence situation that’s going to be a problem. Because they don’t face the same strict regulations as banks do, non-traditional commercial mortgage lenders can underwrite and close loans for your borrowers in as little as a few weeks.

  • Higher commissions:

    If you’re closing loans with banks, particularly residential mortgages, you’re going to be subject to a fee cap. Again, because non-traditional commercial lenders face fewer regulations, brokers are able to make higher commissions with them. For example, APEX protects our brokers up to five points.

Even if you generally close residential mortgages, passing up on these non-bankable commercial mortgages is a mistake. While these loans might seem tricky at first, they’re simple to close if you find the right lender. Small balance commercial lenders are willing to work with these non-bankable borrowers and close their loans quickly. You can also make higher commissions on these loans so not only will you be expanding your product offerings, you’ll also be expanding your income.

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