Finding the right commercial investment lender – that’s easier said than done. If you’re looking to take the first step to commercial investing, picking the right commercial lender could feel like a monumental task. It’s important, but not insurmountable.
Read on for a few tips to consider on your search.
- First, how’s your capital? If it’s low, that says to commercial lenders that it could be a risk lending to you. Make sure you have enough capital to invest in the commercial property. Do a little research yourself and call if you have questions.
- Do your homework. You’ll want to start looking for the best commercial investment rates possible, and many people begin their hunt online. However, you have the option to work with massive commercial banks, hometown lenders, private or “hard money” lenders, and credit unions, just to name a few. Commercial lenders will need to pull your credit report, process a loan application, and only then can they offer a correct rate.
- In addition to looking for commercial lenders online, ask for referrals from friends and family. Make sure you have several options before you zero in. You’ll need to closely examine them to determine which one is the smartest financial move. Don’t be afraid to ask lots of questions when you’re interviewing potential commercial lenders. Do they prefer to communicate with clients by phone, text, email, or face to face? How long are standard turnaround times for pre-approval, appraisal, and closing? At the closing, what fees are you responsible for paying? Can those fees be waived or rolled into the investment? What are the requirements for your down payment? A good commercial lender wants you to ask lots of questions, and should be happy to answer all of them.
- Speaking of questions, there are no stupid questions except for the ones you didn’t ask. The commercial investment process is filled with nearly incomprehensible financial jargon, and you aren’t expected to have a degree in Finance in order to understand everything. Make sure your lender is a skilled enough communicator that they can break everything down in ways that are easy to comprehend.