Industrial Mortgage Challenges
“Industrial Mortgage Challenges Will Increase With Tougher Lender Requirements”
The process of getting an industrial mortgage for a piece of real estate zoned and used for industrial purposes will continue to be faced with more and more challenges as environmental laws become more stringent and lenders become more concerned about their long term portfolio risk.
One of the main concerns facing owners of industrial properties with respect to commercial mortgages is a shrinking pool of bank and institutional lenders that will even consider many different types of industrial properties. And for those lenders that are interested in financing industrial buildings and real estate, the requirements for financing, on average, are increasing, while the amount of leverage that lenders are prepared to extend is decreasing.
More and more industrial properties that require mortgage financing are turning to private lenders in order to try and secure private mortgage financing. But even this is problematic in that for private money loans to work over the longer term, you have to have private lenders that are prepared to offer longer lending periods than the typical one or two year programs on the market today.
And even with private lenders, things such as environmental laws can provide a significant barrier to lending that were not as prevalent as in the past. In the summer of 2011, the standard of the day with respect to environmental liability laws is scheduled to go up, creating still more difficultly with financing properties that have had or still have an environmentally sensitive use.
In order to get proper financing, or any financing on industrial real estate, regardless if you’re talking about acquisition, mortgage refinancing, or a debt consolidation loan, here are some things to keep in mind.
First, allow yourself plenty of time to work through the process of locating and securing the best available financing options for a given property. With bank and institutional lenders, its going to take at least 60 days to get to positive answer with respect to a financing application and in many cases the time required is much longer.
Second, make sure that the property is in the best possible position for financing. Have any historical environmental issues been properly addressed? Is the property survey up to date and in order? Is the property in a good state of repair and appearance? Are financial statements up to date to support debt service? Is the balance sheet and cash flow of the business capable of taking on more debt or maintaining the debt that already exists.
Third, locate an experienced Toronto mortgage broker that placed industrial mortgages and utilize their expertise to not only locate the best available options, but to also assist you in properly applying for financing and closing the deal.
Click Here To Speak With Industrial Mortgage Broker Joe Walsh.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel