Being turned down for a commercial bank loan can be devastating for a borrower. As a mortgage broker, it is your job to guide your borrower through this difficult process and help them to obtain the commercial mortgage they need.

Here’s what you should do when your borrower hears NO from the bank:

Reassure your borrower.

When your borrower is turned down by the bank, you need to let them know that this isn’t the end of the line, and that there are other financing options.  Keep them focused on their goals, and let them know that you will find a way to get them the small commercial mortgage their business needs.

Do your research.

Once you’ve discussed the turn-down situation with your borrower, it’s time to look into alternative financing sources. Contact small, non-conforming lenders, as well as hard money lenders in your area and ask them what kind of commercial mortgage products they offer and what kind of borrowers they serve.

Prepare your borrower for what they can expect.

Once you’ve established connections with alternative lenders and know what you’ll be dealing with, you need to discuss with your borrower what they can expect. If your borrower has been turned down for a small commercial mortgage with a bank, it’s not a good idea to tell them that they can qualify for similar rates and terms.

Provide your borrower with options.

Once your borrower understands that their financing situation has changed and what that means, present their scenario to several commercial lenders. Giving your borrower options in this situation is important, so let them know what each lender can offer them.

While a bank turn-down is a difficult situation for a borrower…

it doesn’t mean that securing a small commercial mortgage is impossible.

Let your borrower know that it’s still possible to attain financing, and present them with a variety of options. If you’ve done your research and prepared your borrower adequately in terms of their expectations, you can help them to obtain the financing they need.

‍