Note: Our Commercial Finance division is part of a larger Commercial house. With over active 350 lenders in our relationship list, we can close everything from neighborhood business, to combined, multi-Wall St, conduit-type loans. This is the periodic blog from our office.
How to Close a Commercial Loan!
The number one most important thing you can do to close a commercial loan is put the loan request with the right lender-in other words, fit the square peg in the square hole. If a borrower is in a rush, he can not get the lowest rate because all the low rate lenders take longer and are backed up. Conversely, if a borrower is buying a building for his business and has very little money down, the SBA loan is the way to go. There are literally hundreds of loan programs, options and thousands of lenders….placing the loan with the lender most likely to close the deal helps everyone win and is the surest way to get the loan to the closing table. Case in point, this week’s…
Closing of the Week!
$4.1 Million Purchase
Location: New Orleans
Type: This was actually a loan for a well known movie star who was buying an investment property in New Orleans. His broker called me to help get the loan done. He needed a good rate, a quick closing and few hassles. The property was two (2) buildings, one (1) rented up and one (1) empty needing rehab and development that they were essentially throwing the second building in for free. They wanted a lender that could fund on the deal now but also be a good source of rehab money down the road when they were ready to renovate and lease up the empty building.
knew exactly where to go. An aggressive bank that not a lot of people know about happened to be right down the street. I had closed another New Orleans loan with this bank and they were quick, efficient, and flexible. They DO NOT have the lowest rate, but they are executors. It ended up being the perfect call.
We closed the loan in 24 days start to finish. As we received title, we found out that the seller DID NOT OWN THE BUILDING! He was buying it from the current owner and doing a consecutive closing-essentially a flip minutes before our loan was to close. None of us knew this going in. Curve balls happen on commercial loans many times and depending on the lender, these curve balls can kill a deal, ESPECIALLY IF IT IS WITH THE WRONG LENDER. This lender however moved forward with the loan. Their reasoning was simple, the property did appraise, the borrower was strong, it was still a good loan. This would have killed the loan with the lower rate conservative lenders. Our lender moved forward anyway, got commitment and closed a few days later. (24 days start to finish.) The borrower got a 5.5% interest rate fixed for five (5) years with no pre-payment penalty which was important as the loan would have to be modified when he went to rehab the other building. It was the perfect loan for this particular deal. The borrower and broker were extremely satisfied. A great loan all around.
Closing a commercial loan is more than having a property and a borrower, it is knowing the right lender to fit that borrower and that deal. Whether it is the lowest rates, a quick close bridge loan, or a stated income alternative loan, we have the lenders and resources and know how to place that deal EXACTLY where it needs to be so that the end goal happens- a closing! If you or someone you know needs a commercial or business loan, give us a call.