Partnering with a commercial lender is critical to closing a deal. Lender’s marketing efforts mean nothing if the lender cannot back up their claims. Brokers want to work with lending partners with proven track record whom they can trust with no surprises, access to product options and the ability to close on time.
Here are 5 key things to look for:
- Reliable pre-qualifications. Unlike residential lending, commercial loans can only be pre-qualified as the property is very important in the underwriting. Approvals are only given after an appraisal is received and reviewed. It is important to have a lender that can turn around a term sheet/pre-qualification in 24-48 hours after thoroughly reviewing the borrower’s financials. You also need to be able to trust the lender did enough research before issuing the term sheet, so you don’t have any surprises before closing that could have been prevented.
- On-time closings. Turning a loan around requires a certain amount of handholding by the lender with the client. Pulling together all documentation and processing it requires a high level of competence across the institution. A seasoned lender knows where the pitfalls are, and how to avoid them.
- Products. Because you have a client with a wide range of needs, you need a lender that has different options for loan products. Aside from the standard Conventional portfolio, rehab, construction, SBA 504, SBA 7a and even USDA programs. You need a lender that has knowledge of all these products and can think creatively for your client.
- Superior customer service. Expectations naturally run high when one professional hands off a client to another. A commercial broker only does a few purchase transactions a year, you want a lender that shares your commitment to providing great service. A knowledgeable lender who takes the time to explain the process of what is needed for a smooth closing. You want a lender that will pick up their phone and always returns calls quickly. You also want a lender you can depend on to communicate proactively by keeping YOU and the client up to date on the progress of their loan.
- Transparency. Lastly, you want to work with a lender you can count on. One that won’t fail to disclose an issue as soon as it arises and has an alternative to remedy the situation whenever possible. Trust is very important. When something goes wrong like a closing is delayed or, worse your client’s loan application is declined that the lender alerts you immediately, takes responsibility, and can explain the institutions decision to you and your client. Therefore, you need to find a lender with lending authority, so you are talking with a decision maker.
Overall– Personal experience matters a lot when agents recommend a lender to a client. More than any incentive brought to the table, brokers need to feel confident with who they partner with.