There are three important questions that you must understand and answer correctly in order to achieve 90% plus commercial financing! Where to go to locate it? What type of project will qualify? And last, how to negotiate for it?

To start, you must understand the lender’s mindset….. If you ask commercial lenders what would be their preferred loan type and the reason why, you will hear similar answers. …Commercial lenders prefer minimum risk projects with certain financial returns.

In other words, most lenders prefer to finance Income Producing Commercial Properties, not start ups, rehabs, construction projects, distressed properties, or empty buildings. Lenders prefer to base their loan assumptions on the last two year’s Net Operating Income statements or (NOI). Income Producing Commercial Real Estate not only reduces risk to the lender, but it also allows the borrower to qualify purchasing the commercial real estate by using the property’s current cash flow, the remaining length of the leases and the tenant’s credit. You must understand this point…… strong cash flow properties can be leveraged to get higher LTV’s.

Let us now address where you can locate this type of financing: The Internet and the Information Age has changed the way the commercial financing business is being conducted. In today’s marketplace, the Internet has become the most cost effective method to compare commercial lenders!

Most non-bank lenders will typically offer you non-conforming financing, because they do not intend to sell the loans. Non-conventional lenders are also far more flexible in structuring terms, rates and options than most banks or other conventional lenders.

If you could compare multiple Non-Conventional lender’s loan offers, from one online loan submission, would this be valuable to you?

We offer our clients a pre-underwritten loan package that will be submitted to numerous Direct Non-Conventional lenders. Lenders prefer the pre-underwritten loan submissions since there is little else for them to do but …MAKE AN OFFER TO FINANCE!

Now this is when the fun starts! Strong cash flow real estate projects will result in many offers to fund. Remember this point; an offer remains an offer, until it is accepted. You as the borrower can now negotiate with the lenders from a position of strength. Since you already have multiple offers, your mindset should be that all terms offered are subject to negotiation! For additional information, go to www.amoneybroker.com/

Steven Battle Commercial Loan Specialist

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