Commercial lending

Securing Commercial Real Estate Financing can be tricky, you have a project to be developed but you need the financing to go forward. Most banks are skittish about investing in the Commercial Market these days, but for obvious reasons that seems like the most logical option, right? Not necessarily, banks have not been the major lenders in the Commercial Real Estate Financing game, even prior to the economic downturn. Yet, where does one turn for Commercial Real Estate Financing?

There are a large number of companies many of which you would never consider major players in Commercial Real Estate Financing. But where does one find who these companies are? You can make the gamble and present your project to numerous companies and firms that may be lending; however the results will most likely be disappointing. The more companies and firms that you pitch your project, the less likely you will secure the funding you are seeking. Word spreads that your proposal for funding was turned down by firm A. Firm B is aware of this and is skeptical of your project from the start and continued skepticism from future potential lenders soon kills any chances of you acquiring the funding you are seeking. Shopping your financing to numerous potential lenders can seriously jeopardize the chances of securing your funding.

But how can I avoid this trap?

I highly suggest partnering with a financing broker. These professionals specialize in matching up the appropriate lender to their clients financing needs. It’s not so much what you know, as it is who you know in Commercial Real Estate Financing. You can submit your proposal to Firm A and let’s say your project is turned down. It may not have been turned down for any other reason than the proposal was submitted to the wrong division or individual.

Recently I secured funding for a major Real Estate Development project; the client was shocked to learn that the lender I had secured for the funding of his project was one of the very firms that had previously turned down his proposal. Initially when I began working on the client’s proposal I was a bit baffled this particular firm had not swooped up the project; it was right up the lending alley. I made a phone call to the officer that I frequently dealt with at that firm and explained the situation. He looked into it and discovered that the proposal was made to an unrelated division of the company. The client’s original proposal was not declined because it was not found sound or viable, but the proposal was submitted to the wrong officer of the firm. Having worked with this particular officer on numerous fundings, he and I discussed the project briefly and the officer requested a complete loan package. Long story short, a letter of intent to lend was issued a week later and my client went into closing shortly thereafter.

A financing broker has the inside track when it comes to Commercial Real Estate Lending; there is no guess work, it’s their job to know who the decision makers are in this competitive lending field. Financing Brokers, just like lenders, have specialized fields that they have knowledge and expertise. Partnering with a financing broker who specializes in the field of financing you seek could be the difference between securing the funding you require or sitting on an unfunded project.