As the economic impacts of the pandemic are beginning to shake out, we’re seeing a lot of notable trends. One of these trends is what’s going on in the lending industry right now. Tabled projects, stimulus deposits, and Paycheck Protection Program loans have left banks flush with lending capital. But these institutions are having trouble finding the right projects to lend to.
Some industries – like shipping and distribution – are booming, while the hotel and hospitality sectors took a massive hit. Many entrepreneurs aren’t quite ready to move forward with big development projects or commercial property investments just yet. At the same time as there is hesitancy in the business sector, just because banks are ready to lend doesn’t mean they’re throwing money at any project that comes their way. Like any other lender, banks want to make sure they’re funding a sound investment, but more significantly, they are restricted based on risk profiles in terms of how they can lend and protect their banking clients at the same time. The shortage of matching opportunities for major lenders means stiff competition for deals that do arise.
As a business owner, how can you take advantage of this competitive lending environment? The simple answer is, present an attractive deal and then shop the available offers. But, like most financial endeavors, that’s easier said than done. Unless you’re either very experienced or have a tight relationship with a lender already, it’s hard to know how to go about it. How do you know how to attract a lender or which lenders are more apt to bite? Partner with an experienced loan broker who can help you prepare your pitch and shop the market.
Here are just a few ways a commercial loan broker can make your deal shine to lenders.
The Package
We might not be talking about boxes and bows here, but we’re not far off. When you’re shopping for holiday gifts, what draws your attention first? Here’s a clue: it’s not just what’s inside. Your eye is going to jump immediately to the most attractive packaging. Once you see the package has everything you need, then you’ll evaluate the quality of the product and the value you’ll get for your money.
Lenders aren’t that much different. If your application doesn’t have everything the lender needs, they’re going to look for somewhere else to invest their money. An advantage of having a commercial loan broker on your side is that they’ll help you put together an attractive package before it goes out to the lender. Not only should you have all the documents you need, but you need to refine that package to show your deal in the best light.
The Hunt
Now that you have your tax returns, earnings statements, expense reports, and other documents packaged up and ready to go, what’s next? It might seem like the next step is to shop around for a lender. First, you have to sift through all of the lenders out there to see who’s got the best rates. Then, present your package to find out what they will offer. But, that’s not the most efficient way to find the best loan, and you won’t get the advantage of lender competition.
We have a network of over 100 boutique and traditional lenders, and we know what each lender is looking for. We are able to get your deal packaged and in front of more lenders faster. Then, those lenders can compete to give you the best offer. This lets you tap into that competitive environment that’s going to bring the lenders to your door instead of the other way around.
The Deal
If you’ve got a great package, you’re likely to get more than just one offer. How will you know when the right one comes along? Should you spring on the first offer you get or hold out for a better one? What if you find an offer that’s almost what you’re looking for, but not quite? If you’ve read this far along, you already know what the answer is. We are your ally, and we bring the insight to help you make a better decision.
Your broker will have their finger on the pulse of the rapidly-changing market. We know what’s out there, what’s likely to become more competitive, and what opportunities might be emerging. We are in the unique position to know if the offers you’re seeing are worth an immediate close. When you want to negotiate for better terms, we are your advocate. You don’t have to be a loan expert to find a great loan; you just need to use one.
The Future
Our job isn’t done just because your loan is approved. There are ways we go well beyond a basic service. If events in your past have diminished your credit, and you don’t qualify for the ideal loan, we can help you establish a credit repair plan to enhance your position for future funding. If you have a former loan that’s draining your finances, we will help you refinance for a lower rate. We can also advise you on costs, revenue and expense ratios and earnings targets in order to position your business for the next round of funding. Look into what your broker offers as a follow-up to closing the deal.
It’s still uncertain what’s coming in this period of economic recovery. While we’re starting to see trends, a resurgence of the virus could disrupt the economic outlook. As workers head back to jobs or stay home to work remotely, commercial spaces will need to adapt. Certain shifts will remain in place, and others will return to pre-pandemic conditions. That’s why it’s more important than ever to have a reliable commercial loan broker on your side. We are able to source funds to help you adapt when others can’t, and for many business owners, that makes all the difference in the world.