Commercial Mortgage Lenders: My Opinion
Remember that commercial lenders will want you to produce a convincing business plan. They will also look to the documentation provided by your past business and at times even personal tax returns. It’s been a commonplace business practice for some decades. In the past, these documents were likely not closely examined, but merely checked to ensure their completeness. In today’s poor economic environment, your application will be mulled over with a fine tooth comb in search of anomalies or errors. You can sufficiently prove past cash flow with a documented history of earnings, as demonstrated via previous tax returns.
A sturdy history of tax returns is the first step in this routine. Commercial mortgage officers today are very unlikely to look favorably on business ideas that are new or could be considered even moderately risky. You will be asked to explain and back up every piece of your action plan. Effective communication of your business aspirations coupled with a positive attitude as to the likelihood of your success will do wonders toward persuading your loan officer to view your venture in a favorable light. One thing that is vital is that you form a good bond with your loan officer, especially during these challenging economic times. If you can obtain the services of an accomplished financial advisor with an exceptional degree of interpersonal skills, the sky is definitely the limit.
Some commercial mortgage lenders may insist on placing an additional lien on your private home apart from the lien placed on your business through the commercial mortgage. This is a tricky situation. You can not blame the lender for wanting to secure the payment of his loan by all possible means. If you trade a lien on your home for the money and your business doesn’t improve, you chance leaving your family out in the cold. You want to look cautiously at this course of action and only follow it with great care.