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Securing a Commercial Mortgage for an Auto Repair Property

Commercial Mortgage
Posted on 
August 22, 2018

There are plenty of small business owners out there looking for commercial mortgages for their auto repair properties, but it can be difficult for them to secure financing from a traditional lender. These are often small businesses, so it’s important for brokers working with these borrowers to choose a lender specializing in helping small business owners. A small-balance commercial mortgage is often the answer.

Here’s what you need to know about your borrower and their auto repair property to get started:

Understand the borrower’s credit history.

Your borrower’s credit will be an important factor in any lender’s decision-making process, so it’s important for you as the broker to understand their credit report and financial history. Make sure you have a recent report and that you discuss any past issues and how your borrower has or is working to fix them.

Learn about the property.

Another crucial piece of the puzzle is your borrower’s auto repair property. As the broker, you need to get some information about the building before submitting the deal to a lender. Find out where it’s located as well as its size. If your borrower is purchasing the property, find out the purchase price. If it’s a refinance, ask them when they bought it and how much they paid for it. Additionally, lenders generally consider auto repair shops to be environmentally sensitive properties, so make sure to discuss any potential issues in that vein with your borrower prior to submission.

Ask them about how they’re planning to use the money.

Small-balance commercial mortgage lenders, like any other lender, will want to know your borrowers plans for the funds they’re providing. Include a section in your loan submission summary that details these plans.

Make sure they have the capacity to pay.

Last but not least, it’s important to determine that your borrower will be able to make their monthly payments. Provide your lender with the relevant financial information, such as profit and loss statements or income and expense reports, which proves your borrower has the capacity to pay.

While finding traditional financing for auto repair properties can be a challenge, your borrowers do have other options. A small-balance commercial mortgage is a great way to get them the funds they need for their business and to allow you to close more deals and earn additional income.


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