Do's and Don'ts of Commercial Borrowing

This is a re-print of Carl Lindros' 'Do's and Don'ts' page on www.mortgage-co.com. Carl Lindros is the principal at Mortgage Co. of Santa Barbara, funding California commercial loans of between $200K to $8 million+, sometimes in as little as 48 hours..

Do's and Don'ts on Commercial Borrowing

"How to get a commercial loan done"

1. Provide complete and accurate information. Include tax returns, operating statements and rent rolls, both current and historic.
2. If you are asked to complete a loan form, be sure to fill every applicable blank space.
3. Provide a concise but complete "story" or business plan in the form of a "Commercial Loan Request". Big packages go to the bottom.
4. Don't hide any problems. Tell me where "the hair" is on your commercial funding situation.
5. Give strengths vs. weaknesses with mitigating factors.
6. Provide pro-formas and budgets.
7. Provide biographical information including activities with similar commercial properties, if possible. Similar, successful experience is a big plus.
8. Address capitalization, sponsorship and liquidity. Where is the money coming from to make the commercial mortgage down payment, what reserves will be provided, what are sources of cash flow if there is a chance the commercial property will not cover the debt service adequately? Are outside lines of credit available?
9. Tell me about the market for your commercial property.

The bottom line: You have only one person to convince, namely me, Carl Lindros. I'm a commercial loan committee of one. I'm quick and I'm fair. If your bank or other institution is not getting the job done, give me a chance and I think you'll be pleased with the outcome. My commercial mortgage rates are very competitive with other private money lenders. In a nutshell, what I want to know is where is the money coming from to make the monthly payments and how will the commercial loan eventually be repaid.

I hope this helps. I look forward to working with you in adding value to your commercial real estate transaction.