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When does your borrower need a non-conforming commercial mortgage?

Commercial Mortgage
Posted on 
May 25, 2017

For plenty of small business owners, obtaining a commercial mortgage from a traditional source like a bank or credit union won’t be an issue. However, many of these borrowers face obstacles that will keep them from getting a bank loan. As a commercial mortgage broker, it’s important for you to be able to determine quickly whether or not a borrower will qualify for bank financing.

Here are some of the challenges borrowers who will need a non-conforming commercial mortgage are likely to face:

Past credit problems:

If your borrower doesn’t fit into the bank’s credit box, they won’t be able to obtain a mortgage from them. If that’s the case, it’s important to seek out a lender who is more flexible and willing to listen to your borrower’s story.

Income verification issues:

A number of borrowers seeking commercial mortgages are unable to verify through only their tax returns that they can repay the loan. Borrowers in this situation will need a lender willing to look at a wider variety of financial information to determine their capacity to pay.

Past due taxes:

Generally speaking, if a borrower has past due taxes, a bank will not offer them a mortgage. If you have a borrower looking to pay off a tax lien, a non-conforming small-balance lender will likely be your best bet.

Time is of the essence:

Due to stricter guidelines and regulations, bank loans can take months to close. Some borrowers simply cannot wait that long. Seek out lenders who can underwrite each commercial mortgage thoroughly and are still able to close within a matter of weeks.

In order to make the best use of your time and your borrower’s time in seeking a commercial mortgage, it’s important to be able to establish early on whether they will be able to obtain a bank loan or if you’ll need to seek an alternative. The faster you’re able to determine this, the faster you’ll be able to find the right lender and close the deal.


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