One of the most interesting aspects of commercial real estate lending is the fact that every borrower has a different story and unique needs. Whereas the residential mortgage arena is full of “comparables,” no two commercial transactions are exactly alike. That said, certain scenarios are more common than others. One well-known case is the borrower looking to refinance their commercial bridge loan. Borrowers enter into loans with hard money lenders for a variety of reasons, but they usually have one thing in common: A desire to take out the bridge loan with more conventional financing once they are able to do so.
Of course, any hungry college student can tell you that not all take out is created equal. If you’re currently looking to take out your bridge loan with a new deal, it’s your job to identify a lender that can best meet your needs.
So how can you find the right take out solution for your funding request? Easy. Check the menu.
The Hard Money Deal
Here’s a scenario we see all the time: Two years ago an investor had a pressing need for a loan to purchase a multifamily property before it went back on the market. In order to get the deal done in the shortest amount of time, the investor accepted a high interest rate loan from a bridge lender.
Now that the term is about to come to an end, the investor is looking to refinance. Naturally, she wants a better deal than the one she took when she was in a time crunch.
The investor may now want to try to refinance with a bank, but you know that even if she gets approved it may take too long to close the deal. And if she gets turned down, she may feel as though she has no other option but to refinance with her hard money lender.
Another common situation involves the entrepreneur whose poor credit history forced him to finance his office space with a hard money lender. He’s made steady improvements to his credit score over the course of the loan term and now he’s ready to refinance with more borrower-friendly terms. The problem is that his credit score, while markedly better than it was in the past, still keeps him from securing a bank loan.
This is where we come in. A non-bank lender like Commercial Direct has favorable terms when compared to hard money solutions, and may offer more certainty of funding than traditional bank lenders.
The Non-Traditional Lender’s Menu
Lenders like Commercial Direct are typically more flexible than banks and more borrower-friendly than short-term lending options. For borrowers stuck between banks and hard money lenders, these types of funding sources offer the best of both worlds – they offer long-term, fully amortizing loans with rates much lower than hard money. And you can expect these types of lenders to close transactions far more quickly than a bank could manage.
Take a look at Commercial Direct’s “menu” to see if our terms and options make sense for you:
- Loan Size: $250K – $5 Million
- Property Types: Multifamily, Mixed-Use, Office, Retail, Warehouse, Light Industrial, Self-Storage, Mobile Home Parks, Automotive, Daycare Center, Bar, Restaurant
- Lending Programs:
- Platinum Program – Straightforward options to help you get the financing you need – on time and hassle-free
- Silver Program – No tax returns or 4506T required on all investor transactions
- Stated Owner-Occupied Program – No tax returns or 4506T required on all owner-occupied transactions
- Bank Statement Program – Income qualified via 12 months of business bank statements
- Terms of 5 and 7 years
- Amortizations up to 30 years
- LTVs up to 80%
- Flexible prepayment options
Getting the right take out solution for your needs
You wouldn’t order take out from a restaurant without looking over the menu. In the same way, you should review various types of lenders’ programs and options before settling on a commercial mortgage take out solution.
That way, you can discover options you may not have known about in the past.
Want to refinance your existing commercial mortgage? Run your scenario through Commercial Direct’s Loan Customizer to see how you could benefit from partnering with a non-bank lender.
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.