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Securing the right commercial mortgage has everything to do with matching your building and property type and related location to a relevant lender.
I say relevant lender in that while there are many lenders that will show interest in financing your property, there will likely only be a few that can actually put a mortgage in place.
There are several reasons.
First, commercial mortgage lenders can be very specific about the type of properties, locations, and industries they will consider. Even if you fit with the criteria of a lender, there still is no guarantee that they will be able to help you due to the fact that their portfolio and funding requirements are always changing. As an example, if a lender has too high a concentration of assets in one category, industry, or even geography, they may decline a perfectly solid applications that they themselves would have approved and funded only months earlier.
As a result, commercial property funding can very much be a moving target and requires knowledge of who’s lending and who’s not at any given point of time for any type of commercial application.
Second, lenders can have significantly different terms and conditions that can have a direct impact on any potential deal or even your interest in what they have to offer. If you’re seeking lower cost financing, then you’ve got to be prepared to meet more terms and conditions to get financing and hopefully you’ll have the necessary time lines to cover everything off.
But time lines don’t mean much if you’re not working with a relevant lender in the first place. As an example, say you have 4 months to get financing in place, but after 3 months, you still haven’t gotten a commitment from a lender and when you do, you still may need a month or more to meet the mortgage requirements. If you’re not working with the most relevant lenders right from the start, you risk running out of time and killing a deal or experiencing some form of cash flow or business interruption issues.
Third, lenders will change their application of their lending criteria based on their portfolio performance, state of the economy and/or industry, person in charge of the decision, and so on. Things like loan to value can vary greatly on a commercial property and cause a resulting commitment to be useless to you if the leverage offered on the property is too low.
Fourth, and perhaps most important. Commercial mortgage lenders that you can directly access will require you to meet and discuss your situation with a front line marketing person. This person’s role is to get applications and pass them back to underwriting where the real decision making process begins. If there is even a remote possibility that the lender can help you, the marketing rep is going to push for you to make an application, not being overly concerned as to how relevant his or her company may actually be to your needs. In many cases, the marketing reps turn over enough that they may not even a) be able to tell how well your situation fits their lending model and/or b) have any idea what their underwriting and credit department are approving at the present time.
If you need a commercial mortgage or are just planning ahead, the best first step is to give me a call so that I can quickly assess your situation and provide you with what I believe to be your most relevant options.