Commercial Lending Facts and the Challenges in obtaining Traditional Commercial Financing :

We are looking for at a commercial mortgage loan that traditional banks have declined .

• Most traditional banks require 3 to 6 months to close.
• Constraint on your deals if you need to close within 3 months or if the seller is anxious to close in a fast time frame.
• Commercial lender who require phase I and II environmental reports will slow down the approval process.
• Strict guidelines on sourcing of funds and asset ownership.
• Most commercial lenders have very specific guidelines on documentation of the source of income or proof of asset ownership.
• Seasoning of funds may be required between 3 to 6 months.
• Required Tax returns and additional personal information.
• Many borrowers can’t qualify for commercial loans if they high business expenses.  Some lenders required the monitoring of tax returns after the loan has been issues to verify income.
• Financing difficulties for special purposes commercial properties.
• Becoming very difficult to finance special business properties such as mobile home parks, restaurant /bars, cash businesses,  new development construction projects, nursing homes, assisted living centers ..etc.
• Relative short balloon payments on special purpose business loans.
• Can expect balloons as short as 3 years.
• Cross collateralization.
• Many lenders require more assets to secure the loan.
• Up Front commitment Fees.
• Business Plans Required in many cases.
• Debt Coverage Ratio (DSCR) - Usually require 1.2 +  No negative cash flow deals.
• Assumability - None. Some with a fee.
• Ongoing financial reporting requirements.
• Many financial reporting covenants required.
• Reserves - Some lenders require 6 months of principal and interest payments in liquid assets.
• Requirement to live in the state where the subject property is located.
• Some lenders require the borrow to live in the same state.

View the national averages for non conforming commercial projects  

To gain a prospective of how our commercial programs can assist you and additional information, please CLICK HERE.

NOTICE: Compass operates in a highly competitive marketplace. Due to this, we provide limited information on our programs via web and mass distribution. Sensitive program information is reserved for clients who have viable projects and have demonstrated genuine interest and ability to pursue the funding options  we have access to. Often times our clients prefer to speak directly with funding source once they have established interest in their project.

  Commercial Programs Overview       How We Can Help      Submit Project Profile      Contact Us      Compass Blog