Commercial Lenders in CT

11 Replies

I need advice on how to get a good commercial lender in Connecticut? I am looking in the New Haven/Middletown/Waterbury area. Does anyone know the best way to get commercial financing.

Hello @Daniel Orlowski ,

My best advice is going to your local meet-up and asking for recommendations. Real estate is a relationship business, referrals are the best way to get a quality commercial lender. (Our next meet-up is this Tuesday) If Manchester CT isn't too far of a drive, we regularly have a few commercial lenders who also invest themselves. 

The best way to get commercial financing is to understand the terms and underwriting process. Typically, single family homes are valued off the comparison approach to determine value. Commercial properties are typically valued off of the income approach and use terms like Debt Service Coverage Ratio (Typically the minimum is 1.2) and CAP rate (Return on your investment if you paid all cash). Commercial financing is a different field, understand it, educate yourself, and network.

You will also "need" 20-25% down with reserves based on the property. 

Typically you will see these in a loan package:

  • Executive summary
  • Appraisal
  • Financial statement
  • Credit report
  • sponsor financial statement
  • property financials
  • borrower resume
  • Purchase and sale agreement
  • legal description of the property
  • photographes
  • map location
  • environmental information (Understand phase 1 and phase 2 terms)
  • property management documents

Best of success! 

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I know this is far away, but I used Charter Oak Federal Credit Union up here in Groton.  I have all by business accounts with them and have used them for 2 commercial real estate loans.  They are responsive, nice to work with and portfolio smaller loans. 

So my advice would be to check your local bank scene and call them up.  When I was shopping around all the local banks were absolutely happy to talk with me.

@Michael Noto I am an Agent for this particular transaction. Most likely going to be a 5+ unit residential apartment or a mixed use (retail store fronts 1st floor, apartments above). 

I live in CT where I am a licensed Real Estate Agent and this is for one of my clients. I also operate a real estate investment company in TN where I know plenty of commercial lenders. Unfortunately, they are all small institutions so they don't venture outside of TN. 

@Scott Hollister I understand how commercial properties are valued. I am looking for a lender that can offer 80% LTV on commercial. So far is has been a battle in CT, most are requiring 70-75 Max LTV. I have been to the fairfield meetup and unfortunately I am not available to make the Manchester one.

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@Daniel Orlowski I've been down this road before with potential clients. Let them do the legwork to find a lender. In the end, if you do find a lender they will probably think it is strange that you are inquiring and not the person who needs to borrow the money.

@Daniel Orlowski ...80 LTV on any commercial difficult to come by, even on the best multifamily assets. I'd say ask some of the local banks in the area, as for those markets, 75% is probably going to be the best found, which is still aggressive. On multifamily, if the #'s work, and above $1MM, borrower should be able to get Agency financing on multifamily/apartments @ 75% LTV.

There are a couple companies out there who will do 80% LTV, but rates are higher than conventional type.

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