Commercial borrowers who can’t qualify for bank financing have options, although they might not realize it. As a broker, you need to be able to present them with these alternatives and sell them on a non-conforming commercial mortgage.
It’s not unusual for borrowers to have some reservations about alternative financing, but you can sell them on these loans if you follow these tips:
Be upfront with your borrower about what they can expect.
It’s likely that some of the non-bankable borrowers you work with will have objections to alternative commercial mortgages because they aren’t familiar with the product or because they were anticipating a bank rate and terms. It’s important to make sure your borrower understand the type of commercial mortgage for which they’ll qualify and the rate and terms they should expect.
Emphasize the strengths of the deal.
There’s an old song that encourages listeners to accentuate the positive, and that’s what every broker needs to do to sell an alternative commercial mortgages. While your borrower may end up with a higher rate, there will be benefits to this type of deal. A fixed and fully-amortizing rate, a good deal on a commercial appraisal, and quick closings are all strengths you can sell.
Keep them focused on their goals.
For brokers, the most important thing to keep in mind when selling a small-balance commercial mortgage is that your borrower has goals. If you can keep your borrower focused on what they want to accomplish with this money, selling the deal becomes much easier.
Brokers working with non-bankable borrowers need to be prepared for their objections and understand how to sell them on alternative commercial financing. If you can manage your borrowers’ expectations, highlight the strengths of the deal and keep them focused on what they want to accomplish, closing the deals will be smoother and you’ll be able to earn more.