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FAQ 2018-05-16T07:18:32-08:00
Do you really need a Commercial Loan Broker? 2018-05-16T07:10:02-08:00

A: Yes, and for several strong defining factors…

Leverage the knowledge… at C2 Commercial we can take your loan request to several active lenders to create competition for your loan, resulting in the best economic terms. Lenders negotiate more seriously when they know other parties are competing for your business.

Time efficiency… by hiring an exclusive loan broker, a borrower saves valuable time by shifting finance responsibilities like finding the best lenders, fielding calls, processing the request and running financial models to their broker. This allows borrowers to focus on their core business.

Alignment of interest… exclusivity keeps the interest of the broker and the borrower aligned. Since commercial loan brokers only get paid if they complete the financing transaction, a non-exclusive broker’s objective could be to get a transaction completed quickly, even if it may not be in the best interest of the client. A qualified exclusive loan broker, who is protected by a retention agreement, can be objective and spend the needed time to identify and negotiate the best financing possible.

Full Service Approach… it is highly unlikely that a non-exclusive broker is going to commit the full suite of resources their platform offers. In today’s market, valuable services like processing, data collection, financial modeling and investment analysis can help a client make a more informed real estate and financial decision.

Create opportunities in a tight market… a qualified broker who understands the local, regional and national lender market is able to be resourceful and effectively use their time to source the best financing for any given scenario. To take advantage of a real estate investment opportunity, you need a financing source that is reliable, fast and predictable. An opportunity is only real if you can take advantage of it otherwise; it’s just another transaction for someone else.

 

How is the commercial mortgage broker compensated? 2018-05-16T07:14:59-08:00

A: Commercial mortgage brokers are compensated by the borrower at closing through escrow. The industry standard is a 1pt fee on total debt sourced and paid at close of transaction.

If I’m a broker or residential loan officer and don’t focus on commercial finance can I work with C2 Commercial? 2018-05-16T07:14:51-08:00

A: Yes, at C2 Commercial we welcome referral based business and respect that you may be referring a very close client and business source. C2 Commercial allows you to be a full financial resource for ALL of your client’s financial needs.

If I refer a commercial lending request and borrower to C2 Commercial how am I compensated? 2018-05-16T07:14:45-08:00

A: C2 Commercial operates its referral platform as a partnership and leverages its time and resources to get your client the best commercial lending possible for their needs. In doing so, we structure a tier’ d schedule for referrals based on workload for both the referring partner and C2 Commercial. Typically, we offer a 25% referral fee but can be adjusted based on complexity and continued deal flow.

Will I Qualify for a Commercial Real Estate Loan? 2018-05-16T07:14:38-08:00

A: Due to the huge losses suffered by commercial lenders during the Great Recession, banks are much tougher when they underwrite commercial loans these days.  Will you qualify?  It all depends on the three C’s of underwriting – credit, capacity to repay, and collateral.  Let’s look at credit first. Commercial banks are the lenders who are making most of the commercial loans today, and banks require good credit.  You will usually need a credit score of at least 680, and a credit score of over 700 is greatly preferred.  Now if your credit score is lower than 680, please don’t panic.  We recently convinced a bank to approve a commercial loan for a veterinarian with a foreclosure on his record (due to a divorce) and a credit score of just 630.  And even if a bank won’t do your particular deal, there are still scores of Wall Street nonprime lenders and hard money commercial mortgage companies willing to make subprime commercial loans.

How do lenders underwrite commercial loans? 2018-05-16T07:14:31-08:00

A: When a bank underwrites a commercial borrower’s capacity to repay, the bank looks primarily to the cash flow of the property.  The commercial property’s net operating income (NOI) must exceed the proposed commercial mortgage payment by at least 25% to 45%.  In the parlance of the commercial financing industry, the debt service coverage ratio must exceed 1.25 to 1.45.  Conduit lenders also require that the debt yield ratio (a brand-new underwriting ratio) exceed 9.0% to 10.0%.