Commercial bank loans

[Todd Belanger]

Hi all. I feel a little stupid with question but I’m having trouble deciding what to do. I’m buying a building for my business. When I started looking one of the first things I did was reach out to a couple of banks to see what was even possible. One of the bankers has been very gracious with his time and helping me figure things out. We have really gotten to know each other and I’d almost consider him a friend at this point. However the other bank is offering me a rate 350 basis points lower. It makes a big difference in mortgage payments. Do bankers expect that you are shopping around? Should I just tell him and ask if he can match it? I feel pretty silly but about it but I’m feeling guilty.

[Jill F.]

Are you sure you are comparing apples to apples? there can be fees and points paid and other costs associated with the loan. I'm pretty sure I could have shaved a bit off my interest rates by shopping but there has been great value to us in working with one bank for the last 4.5 years as we have scaled. We know what they need from us when they go to loan committee, we don't have to put as much down as we use to, we are able to cross collateralize properties where they hold the first to reduce out of pocket on other deals. If the guy has been helpful, I'd at least make sure I had all the details of both loans before I made a decision.