Sick Of All Of The Commercial Loan Closing Headaches?

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Sick Of All Of The Commercial Loan Closing Headaches?

Many lenders are taking steps to simplify and make it easier to close commercial loans by improving the process and assure you that your deal is closed quickly with as little stress as possible. One of the keys to a quick closing is supplying your lender with all the required documentation as soon as possible. Here are some other useful tips that our lenders have compiled to help simplify the commercial loan process.

Most business owners have little time for filling out forms and submitting them to lenders who either do not reply or turn down the loan because the application was not following the process or lacked information. The best approach to applying for a commercial loan is to first understand the process and then make sure you have all of the required forms that you are going to need.

We decided to compile a short list of the process steps that many small business owners would go through when they apply for a commercial loan. Here we go:

  • Understand the process that your lender will use to evaluate a loan
  • Select a lender and a loan officer who is very familiar with the process
  • Meet with the lender and pre-qualify for the type of loan you need
  • Have all of your basic information ready
  • Submit an application for the type of loan you pre-qualified for
  • The lender will review your credit reports, your collateral and your income
  • The lender will determine what additional information may be required, such as personal financial reports, environmental reports for real estate, area maps, title reports, appraisals and lease summaries
  • If approved a letter of intent will be prepared and given to you
  • This is a formal document to ensure that everyone understands the loan and the potential terms
  • Final documentation must be then submitted and the loan given final approval by the lender

Many commercial business owners just do not have time to monitor all of this activity and follow up with lenders and underwriters. They either delegate this work to one of their staff if they have the expertise or they hire a commercial finance broker to help them through the process.

Note that commercial owners applying for a commercial loan of this type will still need to provide all of the documentation as listed above, however the broker will coordinate and work with the lender to make sure that all required information is available.

Another reason for using a commercial broker is that they will be able to negotiate on your behalf to obtain the best rates and terms for your commercial loans. This can be important since loan fees, closing costs and interest rates can make a loan more expensive than it needs to be. The broker can work on your behalf to reduce your overall cost which adds to your company’s cash flow and profit at the end of the year.

If you are sick of all of the commercial loan closing headaches, the two things that can help you with this process is to first learn the process and then hire an expert who will coordinate the documentation required, package it for the lender and negotiate on your behalf with lenders to find the best terms and interest rates.

Lenders also understand the need to keep the process moving along quickly and are working to try and solve these complicated processes. Your broker will be aware of which ones have a straight forward process and which ones do not.