Finding a Commercial Mortgage Lender

A commercial mortgage loan, like a residential mortgage, can be obtained from a variety of lenders. Determining the source of your loan depends upon several factors, such as the size of your business, how long your business has been generating revenue and what your long-term budget is. Consider the following three types of commercial mortgage lenders and how their particular characteristics may best suit your needs.

Financing a Commercial Mortgage Through a Bank

Banks are generally the most common lenders that borrowers turn to for a commercial mortgage. A trusted and long-standing institution to obtain a loan from is usually easy to find in just about any city. Banks are known to require extensive documentation and a long approval process before awarding commercial mortgage loans, which can be off-putting to someone who does not have the necessary paperwork or the time to compile it.

Third-Party Lenders

Third-party commercial mortgage lenders usually provide loans quicker and easier than most banks, though they generally charge a higher interest rate. This is because they are willing to take on more risk than a bank. Also, while a bank’s loan funding sources come from a company’s assets, third party lenders rely on private individuals.

Commercial Mortgage Brokers

Commercial mortgage brokers research various lenders and loan opportunities in order to find the most competitive interest rates for the borrower. Brokers often have existing relationships with lenders and can negotiate deals that otherwise would not be available to an individual. The differentiating characteristic among commercial mortgage brokers and other lenders is that they receive a commission based on the amount borrowed as well as mortgage-related expenses.

The type of lender you ultimately choose is your decision, but keep in mind it is important to research and shop around before settling on an offer. Quality lenders and brokers will encourage this because they rely on their reputation and competitive commercial mortgage rates to gain business, not by discouraging you from speaking with their competitors.