Securing a small-balance commercial mortgage for a non-bankable borrower purchasing a warehouse building doesn’t have to be a challenge. There are non-conforming lenders who are willing to provide mortgages to borrowers looking to purchase or refinance warehouses. Before you contact your lender regarding a warehouse property, though, you should take the time to learn some important information about your borrower, and their financial situation.
Here are five pieces if important information you should know about your commercial borrower:
Information about the collateral:
Your lender will need to know some basic information about the warehouse property your borrower is pledging as collateral. Be sure to include the size and value of the property in your submission documents, as well as photos of the property.
Information about your borrower’s business:
When submitting a commercial mortgage request for a warehouse purchase, it’s also wise to include what kind of business your borrower operates from the property because lenders will need to be aware of potential environmental hazards. If your borrower works with certain types of machinery, your lender will need to know how waste is disposed of, and if there are any hazardous materials present, how they are managed.
Your borrower’s credit scores and history:
Be sure to submit a recent credit report with scores and tradelines to your lender when you send in your borrower’s request. Both you and your borrower should be prepared to discuss any past financial issues that appear on the report.
The reason your borrower is seeking financing:
Your small-balance commercial mortgage lender will want to know how your borrower plans to use the money in order to achieve their goals. Does their warehouse need repairs such as a new roof or electrical system updates? Are they paying off back taxes or a ballooning mortgage? Do they need working capital? Ask your borrower before you submit the mortgage request, so that you can provide the lender with this information.
Your borrower’s capacity to repay the loan:
Your lender will need proof that your borrower has the ability to make their monthly payments. Include all relevant financial information that shows your borrower has the capacity to repay the loan.
Obtaining the information above before submitting the commercial mortgage request for the purchase of a warehouse building to APEX or any small-balance commercial mortgage lender will allow for the lending process to go much more smoothly. Your lender will want as much of this information as possible up front so as to make a quick decision. Providing this information early on will set you apart from other brokers professionally, and will earn you a lender’s trust and respect.