Commercial mortgage brokers should take note that consumer spending decreased 0.1% in July, falling for the first time in six months, according to a Bloomberg report published last week. While overall economic improvements have increased confidence among consumers and small business owners, the U.S. economy has yet to see the pay increases that will boost demand for retail goods. Small businesses affected by this dip in consumer spending could face cash shortages as they prepare for the 2014 holiday season, making it difficult to procure the inventory they need once holiday shopping begins in earnest.

If you’re a broker working with a retail borrower in need of working capital, a mortgage with a small commercial lender may be the solution.

Here’s the information regarding your borrower’s situation you need to be able to discuss with the lender:

The purpose of the loan request:

Whether your borrower needs the loan to purchase inventory or needs cash in the bank while waiting for receivables, be sure to let the lender know.

Your borrower’s cash flow:

In order to make a financing decision, your lender will need to know your borrower’s financial situation. Send the lender relevant financial documents, such as income and expense reports or profit and loss reports.

A description of the business:

What does your borrower sell? How do they run their business? How long have they been operating? These are all things a lender will want to know.

Your borrower’s credit history:

One of the most important tools a lender uses when making a financing decision is credit history. Make sure you send your lender an up-to-date credit report so that they can properly evaluate your borrower’s working capital request

Information about the property:

How big is the property? Where is it located? What is the estimated value of the collateral? Relay this information to your lender.

Despite the drop in consumer spending, retailers still need to prepare for the upcoming holiday season. If you’re a broker who works with retail borrowers, you need to collect the above information about your borrowers and present it to lenders who can help them obtain the working capital they need.

Are you working with a retail borrower in need of a working capital mortgage? Call APEX at 800-262-2739 or submit a loan scenario here.

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