In order to succeed as a commercial mortgage broker, you should be prepared to help many different types of borrowers find the financing they need to achieve their business goals. As a commercial mortgage broker, it’s your job to be the industry expert who can help borrowers find the funding they require. In order to do this, you need to build and maintain relationships with different commercial lenders. You also need to know which type of commercial mortgage lender fits the needs of each borrower.
The local banks:
If you work with borrowers who own larger commercial properties, need a large loan amount, have great credit and have no tax issues, a local bank will probably be your best bet. If these borrowers choose to work with a broker, it’s important provide as much value as possible by shopping the local banks for the best possible deal.
Traditional hard money lenders:
While there are bankable borrowers who can benefit from the services of a broker, the small business owners who can’t obtain a bank loan are going to be the borrowers who most often need your services. When working with borrowers who have ongoing credit issues and low scores, need a bridge to sale or is dealing with seasoning issues, a traditional hard money lender is often the answer. Keep in mind that while these lenders can offer a quick fix, it also means your borrower will pay a hefty interest rate and fees.
Non-conforming, small-balance lenders:
Many commercial mortgage brokers think their borrowers have only two options: the bank or traditional hard money. However, there is a third option in the form of non-conforming lenders who specialize in small-balance commercial loans. These lenders will listen to your borrowers’ stories and will work to understand their unique financing needs.
Getting your borrowers the commercial mortgages they need is your job as a broker, and knowing where to place each loan is very important. You need to build partnerships with a variety of lenders in order to present your clients with the best possible financing options. Getting to know these lenders will allow you to provide your borrowers with excellent service and to close more commercial mortgages.