Commercial mortgage brokers offer a slew of opportunities for increasing your revenues by finding new ways of financing your projects with lower interest and fees. In addition to commercial loan financing, commercial lenders can work as advocates to find investors. Look into the viability of bringing in business mortgage brokers to spark your sales and increase revenues.

Lenders for commercial loans provide services that can be immensely helpful to your own business interests by creating new avenues of sales for your company. Commercial lending brokers can be brought in to work from your own location to act as your accounting facilitators. You can bring in a commercial lender to review your budgets and plans to make project recommendations. Begin making the most of commercial mortgage lenders in a number of ways.

1. Use commercial mortgage brokers as advisors

2. Outsource to lenders for commercial loans

3. Research the options that business mortgage brokers can bring to you

Action Steps to Commercial Loans
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Find out what commercial mortgage lenders can do for you

You can use the techniques and resources that work successfully for commercial lending brokers through online services that provide updated information on the trends shaping the industry. Give your marketing team additional resources to get the job done by bringing in commercial lender consulting services.

I recommend: Go to Commercial Mortgage Insight for reports and artilces that are important to both new and seasoned contractors. Find a wealth of information for professional commercial developers at National Mortgage News.

Look for the best commercial lending rates

Various bankers have access to different kinds of commercial loan products. By working with a number of commercial mortgage brokers, you can narrow your choices and find brokers who are more creative and can see your own vision. They can put together the funding that you need for your projects.

I recommend: Get direction and educational information that can be very valuable to your business at the National Arbitration Forum. Go to the Mortgage Chronicle for information and news that will keep you informed of important industry activity.

Integrate a commercial loan financing mix in your operations

Find out how commercial lenders can add a dimension to your financing and marketing efforts through market research and a mix of various commercial loan financing products. Investigate the options that are available to increase your loan success and put your company in a profitable position.

I recommend: Keep yourself informed of the kinds of news and data that is driving the commercial lending industry by subscribing to the Commercial Mortgage Alert. Make the most of a brokerage firm with access to a variety of lenders at Real Web Funds.

Tips & Tactics for Getting a Commercial Mortgage

Helpful advice for making the most of this Guide

• •  While it can behoove you to have a number of business mortgage brokers working on your behalf, by building a strong relationship with one lender, you often can get better commercial mortgage rates and they are willing to take more risks with a dedicated customer.

If you want to buy or expand an office complex, warehouse or retail building, you need a commercial mortgage. Commercial loan rates can vary considerably based on the amount, duration and type of loan as well as on the lender. That's why it's so important to choose the right commercial mortgage lender. Doing so can help you:

1. Secure financing to buy or expand your business property.
2. Secure a long-term location without rental rate hikes.
3. Profit from the increase in value of your business property.
4. Secure a mortgage loan at a favorable rate and term.
5. Increase your tax deductions.

Action Steps
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Prepare your financials

Commercial mortgage lenders want to see hard evidence that you can repay the loan, including financial statements, balance statements, profit-and-loss statements, projected cash flow statements and more. Lenders may want to see a business plan as well as background information on you and your partners.

I recommend: Keep this commercial loan readiness checklist handy so you know which financial statements to prepare. Download a sample balance sheet and a profit-and-loss statement from UrgentBusinessForms.com, which also sells templates in Excel, PDF and Word formats. A downloadable template for cash flow projections is available from 1000Ventures.com.

Know your ratios

Most commercial mortgage lenders require certain percentages for three important ratios: debt service coverage ratio (DSCR), loan to value ratio (LTV) and debt ratio. DSCR is the net operating income divided by the mortgage payments. LTV is the total loan amount divided by the fair market value of the property. Debt ratio is determined by dividing your monthly debt obligations by your monthly income.

I recommend: Keep abreast of commercial loan rates and use the debt service calculator courtesy of CommercialBanc.com to estimate your DSCR.

Shop for mortgage lenders

The commercial mortgage and commercial lending market is crowded with bankers and commercial mortgage brokers eager to place your loan. Choosing one requires careful consideration of rates, terms, duration, down payment and other conditions. Often the bank that handles your business checking accounts may be willing to offer you a commercial mortgage loan at an attractive rate or with favorable terms in order to get more of your business.

I recommend: Among the big banks that offer commercial mortgage loans to small businesses are Wells Fargo, Citibank and Wachovia, which allows you to apply online. Among the numerous online services that help you shop for commercial mortgage loans are iBank and Businessfinance.com. Fill out a short online form at BuyerZone.com to receive quotes from several commercial mortgage lenders.

Negotiate a deal and close the loan

Choose two or three lenders that seem to offer the best deals and most closely match what you need. Negotiate with each one, letting them know that you're shopping several other sources. Having options gives you at least some leverage in the negotiation process. Once you have decided on your top pick, proceed to finalizing your commercial mortgage loan. It's wise to use an attorney to review the loan documents and make sure your interests are served and protected. Your attorney can also help walk you through the closing.

I recommend: The Capital Consortium offers a number of sample mortgage loan documents online for review. Find an attorney who specializes in real estate at AttorneyPages.com.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Learn from rejection: If you get rejected for a commercial mortgage loan, find out why and try to remedy the shortcoming. Then apply again, perhaps with a different lender.
• •  Watch for balloons: Commercial mortgage loans are often for periods of 10 years or less, with the entire remaining amount due at the end of the term as a balloon payment. Be prepared to refinance or pay off the balance.
• •  Down payments required: Most lenders require at least a 20 percent down payment on a commercial loan.
• •  Look for hidden costs: Extra loan fees and costs can add up. Lower-interest loans can sometimes cost more because of extra fees and charges.
• •  Keep your credit clean: If you have other business credit lines, keep them up to date and out of trouble. Any bad credit marks can make mortgage lenders leery.
• •  Pay attention to restrictions: Mortgage lenders will sometimes impose restrictions on the use of your property as a condition of the loan. Be sure to ask about any restrictions and make sure that you agree with them.

Commercial mortgage brokers face a changing field as technology and the economy change and fluctuate. Stay on top of the trends in commercial mortgage rates so that your operations can be prepared to handle new business as efficiently as possible and serve current customers armed with the most recent news. Commercial mortgage lenders and executives need to know where they fit in the scheme of things as relates to their own clients’ best welfare in order to remain competitive.

Find the most information you can about the latest business mortgage solutions by keeping up with commercial mortgage lending news and trends. Look for commercial loan financing solutions by communicating with other business owners with similar needs. As a commercial lender, you should find out about unique and cost-effective commercial loan rates through industry publications and business-owner blogs. As you build your network, find numerous ways to keep up with commercial mortgage lenders news and trends.

1. Use trade associations to keep up with commercial mortgage lending

2. Subscribe to business mortgage publications

3. Sign on for email alerts from commercial lending brokers

Action Steps
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Share information with other commercial lenders

Blogs and online newsletters are replacing print magazines in droves and they can be a very efficient means of communication. Find an Internet blog or website that provides trust-worthy information and attracts reliable posting participants.

I recommend: Commercial Property News is a great site to keep up with commercial mortgage rates and the latest news. The Mortgage Bankers Association is a group that can put you in touch with other professionals in the field as well as provide insight into the news of the day and the overall commercial banking landscape.

Read up on changes in commercial mortgage loan practices

Browse the news affecting your industry, or an industry with which you'd like to business. You'll be better served by knowing about any big changes when you go onto client meetings or bid on contracts armed with the latest updates and aware of what the competition is offering.

I recommend: Subscribe to Mortgage Daily for updates and trend reporting as well as daily feeds and forums. Find blogs, breaking news and trend reports at National Mortgage News.

Receive commercial loan rate email alerts

Look for information sources that will send you updates as they occur so that you will be on the alert for emerging issues that will affect your business. Assign employees to check with important sources throughout the day and report any significant news to you.

I recommend: The Mortgage Press mines the news sources all over the world to put together all the important information on one site. Mortgage Rate News has a variety of blogs and resources for bankers to find up to date reports and analysis.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Stay active in networking and commercial lending brokers trade associations that keep their members apprised of the news as it affects their businesses to develop relationships that can share news with you that you might overlook.

Commercial mortgage lenders must have a thorough knowledge of all of the terms associated with the industry in order to do their job properly. For example, they need to know how to determine the LTV of a property or the debt ratio of the applicant. They should also be able to explain these complex terms to potential borrowers in a way that's easy to understand. This ensures that there is no confusion throughout the loan process.

Action Steps
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Loan to value (LTV) ratio

A mortgage lender determines the LTV ratio by dividing the total amount of a mortgage by the value of the property, then multiplies by 100 to get a percentage. The LTV is lower when the borrower pays a higher down payment. For example, if a borrower pays a $40,000 deposit on a $200,000 home, the LTV is 80%.

I recommend: Zimbio.com explains the LTV ratio and why lenders prefer a low LTV.

Debt ratio

The debt ratio is a way for lenders to determine whether a borrower can afford mortgage payments. To determine the debt ratio of a business, a commercial mortgage lender would determine what percentage of a business' income is used to pay debt. All lenders have a maximum debt ratio that they will allow, including the mortgage payments, usually 36 percent to 42%.

I recommend: At How to Buy a House, Michael Bluejay talks about debt ratios for individuals with varying debts and illustrates the concept with pie charts.

Debt service coverage ratio (DSCR)

Similar to a debt ratio, the DSCR measures the amount of a mortgage against how much income the property can generate. This is what lenders will use when the property itself is the business investment.

I recommend: For more information on the debt service coverage ratio, look to Commercial Banc.

Fixed-rate and adjustable-rate mortgages (ARM)

In a fixed-rate mortgage, the interest rate stays the same throughout the life of the loan. In an adjustable-rate mortgage, the rate changes after a certain period of time. ARMs typically have a low interest rate to begin with, but may surprise borrowers with a large jump in payment when it changes.

I recommend: Choosing the right type of mortgage can be confusing. Forbes talks about the various fixed-rate mortgages and the variety of ARMs available.

Balloon mortgage

In a balloon mortgage, the company pays a fixed rate for a short period of time, such as five years. At the end of this period, the remaining balance of the mortgage is due. This is attractive to business owners that may not have enough money to pay a traditional fixed rate mortgage when they are just starting.

I recommend: At MtgProfessor.com, you can learn about balloon mortgage payments and see an example.

Non-recourse

Many commercial mortgages are non-recourse loans, which means that if the borrower defaults, the lender can repossess the property- but has no ability to recoup losses if the property has decreased in value.

I recommend: Look for a detailed explanation from All Reverse Mortgage Company.