The frustration for clients and brokers is vast at a time when some business people can see the opportunities there to build on their current business or start a new one and the banks have shut the door to anyone that is not a blue chip case.
This is where your COMMERCIAL MORTGAGE BROKER will almost certainly earn their fees twice over and by using contacts built up over a long period of time to be in a far better position to help you obtain your COMMERCIAL MORTGAGE where you may have failed.
The presentation of your proposal to the lender is very significant in the process of acquiring a Commercial mortgage. What lenders and the dreaded credit committee do not like is underwriting a case on the drip feed of information.
Lenders are asking for a great deal of information now in order to consider a case, which may at times seem a little over the top, but by going that extra mile and giving the lender every possible bit of relevant information up front you are increasing the chances of success by a very big margin.
Commercial Mortgage lending is changing and we are seeing private equity groups coming into the market with groups of Investors and Trust fund money. This makes life very exciting for any COMMERCIAL MORTGAGE BROKER as we are now able to structure deals where the client may be short on the deposit funds required up front or may need some further help in obtaining funding on top of the High Street Bank in order to complete the development by way of mezzanine finance, prior to an on going sale or refinance by a long term lender.
We can no longer look at the High Street as our only form of obtaining finance as there is a vast array of funding from various sources that we can use to achieve our objective.
Loans to value have become tighter as lenders feel more comfortable with the lower loans to value which in banking means lower risk. They seem to be happy at 70% LTV for most proposals and in some cases a little lower depending on the type of security being offered.
As you may gather from most of the broadsheets and the red top newspapers, the leisure industry and retailers have been hit very hard by the down turn in the markets and lenders are naturally very cautious in lending to clients where the future is uncertain.
However, in any down turn there are clients who have been prepared for the fall in sales and see the opportunity to make money as we come out of the current gloom and doom.
We must always try to look round corners when our clients come to us for help in arranging a COMMERCIAL MORTGAGE OR FINANCE rather than just saying ‘no’, as most lenders tend to. If the business has been well run and has shown good profits in the past and has the ability to trade out of the dip then we should look at every avenue of finance to try and put together a COMMERCIAL MORTGAGE package that will help the client to go forward which in the end helps us.
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