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Getting your Borrower a Commercial Mortgage for an Auto-Repair Property

Commercial Mortgage
Posted on 
February 24, 2015

Throughout the country, there are plenty of commercial mortgage borrowers looking for financing for their auto-repair properties. Because many of these businesses are small, these borrowers often have a difficult time obtaining financing from traditional sources. However, there are small-balance commercial lenders who specialize in helping small business owners. To obtain a commercial mortgage from a company like this, here’s what you need to discuss with your borrower:

“Tell me about the property.”

It’s important to get some information about your borrower’s auto-repair property before submitting the scenario to a commercial mortgage lender. You’ll need to ask your borrower where the property is located and the size of the property. If they’re purchasing it, you’ll need the purchase price. If it’s a refinance you’ll need to know when they bought it and how much they paid for it. Auto repair shops are considered environmentally sensitive properties by lenders, so it’s a good idea to ask your borrower if they are aware of any issues in that respect.

“Let’s talk about your credit.”

Your borrower’s credit report will be an important factor for any lender. Provide your lender with a recent credit report that includes scores and trade lines. Be ready to discuss any issues on the report and prepare your borrower to do the same.

“Explain to me how you plan to use the funds.”

For non-conforming lenders, understand your borrower’s story and how they plan to use the money is very important. Be sure to include a section in your loan summary that details the use of proceeds.

“Let’s discuss your capacity to pay.”

When it comes to small-balance commercial mortgages, every lender will want to be certain that the borrower has the ability to make their payments. Make sure you provide relevant financial information that will confirm your borrower’s capacity to pay, such as profit and loss or income and expense reports.

While it may be challenging to find traditional financing for auto-repair properties, there are other options. A non-conforming commercial mortgage lender is often the solution for these borrowers.  Before submitting your borrower’s application, be sure you have all the necessary information about the property, your borrower’s credit, their plans for the proceeds and their ability to make mortgage payments. The more information you and your borrower provide the lender, the simpler it will be to obtain a commercial mortgage for the auto repair business.

For more information about how APEX can help borrowers looking to finance auto-repair properties, call 800-262-2739.


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