Why We are in The Business of Making Small Commercial Mortgages

By: Zack North

Our nation’s small business owners, investors, entrepreneurs, and other self-employed professionals are a diverse bunch. However, they do have one attribute in common: they all thrive on being in control – control of their time, control of their finances, and control of their business’ growth. Unfortunately, a growing number of these professionals are finding that there’s one aspect of their life they have no control over at all: their small commercial mortgages.


Main Street’s business owners and investors regularly look to secure commercial mortgages of anywhere between $250,000 and $2 Million. The problem? Restrictive bank programs routinely prevent these borrowers from getting the funding they need.


A recent Pepperdine study found that only 39% of business owners with less than $5 Million in revenue that sought bank financing were successful. This leaves the majority of borrowers out in the cold and without control over their business’ future.


Commercial Direct’s Approach to Small Commercial Mortgages

That changes with Commercial Direct. We’re breaking the traditional lending mold by making it easier for our nation’s small business owners, investors, entrepreneurs, and other self-employed professionals to get a commercial mortgage that works for their business.


Here’s why:


Borrowers aren’t getting the help they need from Banks

Loans from $250,000 to $2 Million can hardly be considered “small,” but that is indeed how they are classified within the commercial mortgage industry. Traditional lenders that routinely handle multi-million dollar transactions don’t always give these loans the consideration they deserve.


In the past, borrowers could rely on community banks to see things from their perspective. But the number of these smaller institutions has decreased steadily in recent years. The Independent Community Bankers Association reports that the number of community banks has been reduced by more than 25% since 2008. Now borrowers are left feeling as though they must either try their luck with big banks that aren’t built to meet the needs of small businesses or take their business to bridge lenders that offer short-term loans and high rates.


Commercial Direct fills that gap in the market, giving borrowers the opportunity to secure a long-term solution while taking advantage of more flexible programs and a speedy transaction process.


Small business owners and investors need more flexibility

Commercial borrowers come in all shapes and sizes. Yet most traditional lenders tailor their programs to meet the needs of a particular type of borrower – typically one with excellent credit and no documentation issues.


Unfortunately, few commercial borrowers fit this idealized profile. Whether it’s due to the nature of their business or a financial difficulty they endured in the past, most credit-worthy borrowers require some flexibility from their lender if they hope to secure the funding they need.


Consider the entrepreneur whose tax returns don’t accurately prove the success of her business. This type of borrower has historically struggled to work with traditional lenders whose loan committees can deny loans based purely on the status of such documentation.


Flexibility also matters when it comes to cash-out refinancing. Business owners and investors both have a common need to take cash out of their existing mortgages – business owners may want to use the cash to purchase new equipment, while an investor could use the cash to purchase another property. The problem is that traditional lenders are usually limited in the amount of cash-out they can provide.


Commercial Direct knows how important this cash can be for borrowers and offers unlimited cash-out on commercial mortgage refinances.



Expert help is hard to find

Business owners and investors may rely on their own expertise to achieve success in their field, but they shouldn’t expect to know all the answers when securing financing for their commercial property. Commercial mortgages are complex transactions that, while similar in some respects to home loans, feature a number of unique aspects that can easily trip up first-time or even experienced borrowers. In order to get the best funding solution, borrowers should always try to work with a partner that best understands their specific needs.


Commercial Direct’s team has closed and funded more than 20,000 small commercial loans. They’ve seen it all before and are equipped to provide solutions beyond the one-size-fits-all approach all too commonly found in the industry today.


A byproduct of that expertise is transaction speed. When a non-traditional lender has perfected their process and positions their borrowers for success, their team can close loans quickly and hassle-free. Commercial Direct’s team routinely closes loans in less than 30 days – a feat few traditional lenders can match.


A smaller loan amount doesn’t make a commercial mortgage any less complex. Borrowers can save serious time and sanity by working with experts who live and breathe these types of transactions.


Business owners and investors shouldn’t have to relinquish all control when searching for a commercial loan. If they partner with a lender that understands their needs and provides the flexibility they need to be successful, they can confidently secure a commercial mortgage on their own terms.

Author: Zack North

Zack North is the Director of Marketing for Commercial Direct.  As a regular contributor to a number of top industry publications, Zack enjoys writing about topics that help investors and business owners approach commercial mortgage financing with confidence.

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