As a commercial broker your most fundamental responsibility is helping clients secure the right commercial mortgage for their business. Along with a comprehensive knowledge of the evolving commercial lending landscape, you need a thorough understanding of your borrower's unique needs and goals, in order to find the perfect mortgage solution.
As simple as it sounds, the best way to understand your client’s situation is to have a detailed conversation – making sure you touch on those essential factors that should always be considered when determining the right commercial mortgage for your borrower. Here’s a basic checklist of points that should be discussed with the borrower as you evaluate their needs.
Key Discussion Points Checklist
- The Borrower's Needs:
Before you think about WHICH commercial mortgage to recommend, it is essential to have a thorough understanding of WHY the borrow is looking for funding. What are their financial goals, business plans, and specific requirements?
Starting with a detailed interview gives you the opportunity to gather detailed information about their industry, business model, financial statements, cash flow projections, and the collateral they have available — all of which can help you tailor your ultimate mortgage decision.
- The Property:
As simple as it may sound when evaluating a commercial mortgage, the property is a significant factor in the decision-making process. Consider things like the location, property type, and overall condition, as well as its income-generating potential and long-term viability. Assess the property's value, market demand, zoning restrictions, and any potential risks or environmental concerns. In addition to helping you choose the right mortgage for the borrower, this will help you determine the suitability of the property as collateral and assess the overall risk associated with the loan.
- The Borrower's Creditworthiness:
Often the most sensitive part of the loan discussion centers around reviewing the borrower's credit history, including their credit score, payment history, any outstanding debts or legal issues, debt-to-income ratio, and liquidity. A strong credit profile increases the chances of securing favorable loan terms and conditions, while a weaker profile may result in higher interest rates or collateral requirements.
- Available Loan Programs:
Commercial mortgages come in various forms, each with its own terms and conditions. Here at Apex Commercial Capital, for example, we offer a wide range of commercial mortgage solutions with multiple options that must be considered. It's crucial to explore different loan programs with the client and identify the ones that best suit their unique situation. Present the advantages and disadvantages of each program and loan type and determine the best options with the borrower's input.
- Loan Terms and Conditions:
Loan terms and conditions significantly impact the borrower's financial obligations and the overall cost of borrowing, so these must be discussed upfront. Thoroughly review and compare critical terms such as interest rates, repayment schedules, loan duration, prepayment penalties, and fees. Ensure the borrower understands the implications of these terms and can comfortably meet the financial obligations associated with the mortgage. Aim for a balance between a competitive interest rate and a repayment plan that aligns with the borrower's cash flow projections and long-term goals.
It All Comes Down to Communication and Collaboration
Effective communication and collaboration throughout the process are essential to ensure your client gets the right mortgage to achieve their financial goals. As a trusted advisor, your knowledge and expertise – of the industry and the individual client – can make a significant difference in the outcome of the loan.
At Apex Commercial Capital, we pride ourselves on maintaining open lines of communication with the borrower throughout the mortgage process. Keeping the client informed about the progress, requirements, and potential challenges is central to our way of doing business – addressing any concerns promptly and providing guidance and support when needed. A transparent and collaborative approach fosters trust and strengthens the working relationship with the borrower, making the mortgage process smoother and more efficient.
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.