Ever Wonder Why The Banks Don’t Like To Own The Real Estate?
“Are Banks Really the Best Commercial Lender For Your Project?”
A commercial lender offers loans backed by hard collateral, usually real estate. Although real estate is not the only type of asset lenders will loan against, it is the easiest to because real estate collateralizes itself. Usually a commercial lender's lending criteria will be more flexible than at the local bank. This is because most banks focus on providing private residential financing for individuals of the local community, not large amount loans for real estate or commercial property acquisition. Most commercial lenders are not so much concerned with the borrower's financial record and qualifications as they are about the mortgage property value.
As opposed to banks, commercial lenders are able to give funding commitments in a relatively short amount of time. In addition, they provide the loan in a short amount of time-usually within several weeks depending on the mortgage terms. Commercial lenders also offer a wide variety of loan products. Perhaps the most popular of these products is the bridge loan. Bridge loans are most often used to avoid foreclosure and take advantage of time sensitive real estate opportunities.
If you can find a really aggressive funder, it is possible to close in as little as 30-45 days for acquisitions (10-20 days for Bridge Loans). This is assuming that all of your paperwork is in order when submitting it to your Lender.
Why so fast? The with a non-bank lender, the strength of the property, not the borrower, qualifies for the Loan. Think about it from the lenders perspective. Why would it matter what my borrowers credit looks like when I have a $5,000,000+ loan? What could I possibly take from this borrower to get my investment back besides the property? Your borrowers personal income will not qualify for a loan on this type of property but the cash flow, strength, and history of the property will.
Who would you rather work with a Bank or a non-conventional Commercial Lender?
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