Commercial Loans - Using a Commercial Mortgage Broker
If you are in need of commercial loans these days, it might be a good idea to look into using a commercial mortgage broker. Financing has changed dramatically, and the days of being able to walk into any bank to obtain a commercial loan are over for many borrowers, even well qualified borrowers.
A good commercial mortgage broker is becoming an invaluable asset these days. With the recent downturn of the real estate markets, banks and institutions have tightened up on their lending. Loan to value requirements are lower, debt coverage ratio requirements are higher, and appraials are scrutinized on every deal. In this kind of lending environment, it is important to be able to shop the proper chanels to find a fit for your commercial loan needs.
Using a commercial mortgage broker will allow you access to many programs and lenders that may otherwise be unavialable to you. These days, community banks and regional banks are really filling a niche for commercial loans. These are small banks that may not have a national presense, or even a state wide presense, but are nonetheless making loans.
Many of these regional banks you may never have heard of. That is where the value of a good commercial mortgage broker comes in. A good commercial mortgage broker will have the resources to find a fit for your lending needs. In addition to the larger institutions, your loan will have the ability to be shopped to the regional banks, and if it comes to that, even private money lenders.
These are all options that takes years of experience and resources that have been acquired over time. When choosing a commercial loan broker, be sure you are getting someone who specializes in commercial lending. A residential broker is not the proper choice here. The resources, terminology and general paperwork are completely different. Someone who specializes in commercial loans should be able to talk with you about your scenario and speak the commercial language.
A good litmus test is to ask some simple questions. For example, you might ask something that will require a simple computation with some basic information given. Tell your potential commercial mortgage broker that your NOI is $100k, and average cap rate for your area is 8% and ask if they can estimate what your property might be worth. If you don’t get a quick answer, you should probably keep searching. The correct answer you would be looking for, by the way, is $1,250,000, based on the NOI and cap rate.
Good luck in your search, hopefully this has been helpful to those in search of commercial loans. Check back in, we will be looking at more commercial lending topics in the near future.
Add comment Tagged: california commercial loans, commercial loan, Commercial loans, commercial mortgage broker April 9, 2009
