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Current Challenges Faced by Businesses in Securing Commercial Mortgages

Commercial Mortgage
Posted on 
April 5, 2024

Securing a commercial mortgage is a critical step for businesses looking to purchase or refinance property. However, in 2024, businesses face several challenges in obtaining these loans. Understanding these challenges is essential for businesses seeking financing. In this blog, we'll explore some of the common hurdles businesses face in securing commercial mortgages in 2024.

  • Economic Uncertainty

    Economic uncertainty, fueled by factors such as geopolitical tensions, inflation, and supply chain disruptions, can make lenders cautious. Lenders may tighten their lending criteria, making it more challenging for businesses to qualify for commercial mortgages. Businesses need to demonstrate strong financial health and stability to overcome this challenge. Businesses should also research alternative financing options. Non-traditional lenders like Apex may be able to provide financing to borrowers who cannot meet stricter lending guidelines at banks and other traditional lenders.
  • Interest Rates

    The Federal Reserve is still forecasting three interest rate decreases by the end of the year, but the key rate has been left unchanged as of their March meeting. While the Fed has signaled that it is confident that inflation will resume its downward trajectory, this higher rate environment can make borrowing more expensive for businesses, impacting their ability to qualify for and afford commercial mortgages. Businesses must carefully evaluate their financial position and assess the impact of interest rates on their ability to repay the loan. Lenders like Apex will work with borrowers who need alternative financing to provide a financial solution with the best possible rate and terms, making them an asset for non-bankable borrowers in this rate environment.
  • Industry-Specific Challenges

    Certain industries may face additional challenges in securing commercial mortgages. For example, businesses in industries that are heavily impacted by economic downturns, such as hospitality and retail, may find it harder to secure financing. Lenders may perceive these industries as higher risk, leading to tighter lending criteria. In these instances, working with an alternative lender could benefit borrowers. Lenders like Apex who have vast experience in the commercial space are more likely to evaluate individuals in affected industries on a case-by-case basis rather than painting certain property types with a broad brush.
  • Competition for Financing

    Competition for financing can also pose a challenge for businesses seeking commercial mortgages. Large corporations and real estate investors often have access to more resources and may be able to secure financing more easily than smaller businesses. This can make it challenging for small or medium-sized enterprises to compete for limited financing options. In this environment, these kinds of businesses may benefit from working with a lender like Apex that is committed to looking beyond the numbers, helping small businesses meet their goals, and providing an excellent customer experience.

Securing a commercial mortgage in 2024 comes with its challenges. Economic uncertainty, rising interest rates, industry-specific challenges, and competition for financing are some of the hurdles businesses may face. To overcome these challenges, businesses must be proactive in addressing their financial health, understanding the market conditions, and working with experienced lenders who understand their industry. By doing so, businesses can increase their chances of successfully securing a commercial mortgage in 2024.

Apex Commercial Capital is a full-service lender focused on providing commercial mortgages and equipment financing to small businesses. We understand that the borrower is more than a credit score – we consider all the relevant financial information when reviewing a loan request, looking beyond the numbers to understand each business owner's objectives in determining how we can best work together to achieve them. Call (800) 262-APEX today to talk with our team of small business mortgage specialists.


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