As we come upon the halfway point of the year commercial lending continues to be in a state of flux. There are pockets of the country where banks are still lending, but we’re seeing more and more banks telling us they’re holding on any new commercial loans. Community banks especially seem to be the ones constantly shifting from lending to holding without much notice.
Because of this, many business owners are turning to commercial loan brokers to help them find the funding they need through non-bank lending sources. Unfortunately, many commercial loan brokers seem to be ‘order takers’ instead of solution providers to business owners. In our lending company we’re seeing requests for rates and terms that simply aren’t available in the commercial lending space, such as requests for interest rates below 6% and loan leverages that you can’t get even in a great lending environment, let alone when the industry is sputtering along.
Commercial loan brokers who don’t take the time to educate themselves and their clients on the current lending environment are setting themselves up for failure. Business owners are looking for solutions! When commercial loan brokers don’t provide accurate and current information regarding current loan costs and leverages, they’re doing those business owners a disservice.
The other issue we’re seeing from commercial loan brokers is that when asked for documents that will help decision making on a loan request, they respond “give us a term sheet and we’ll get you the documents you need.” As a lender, it’s a red flag when you can’t get the information needed upfront to make a decision on a commercial loan.
Successful commercial loan brokers know the commercial lending landscape and they stay connected with what lenders are and are not willing to do. If you’re simply an ‘order taker’ and aren’t spending the time to provide good feedback to your client, then your chances of success are limited.
𝗦𝘁𝗮𝘆 𝗶𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗼𝗳 𝘁𝗵𝗲 𝗹𝗲𝗻𝗱𝗶𝗻𝗴 𝗹𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲 𝗮𝗻𝗱 𝗯𝗲 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗱𝘃𝗶𝘀𝗼𝗿 𝘆𝗼𝘂𝗿 𝗰𝗹𝗶𝗲𝗻𝘁𝘀 𝗻𝗲𝗲𝗱!
At times like this, commercial loan brokers can become an invaluable resource to business owners, who will in turn utilize your services again in the future. But you can’t help your clients if you don’t know what’s happening in the commercial lending industry. In an ever-changing lending environment, it’s helpful to be involved in a community that’s constantly pursuing and sharing industry knowledge, education, and resources such as the Commercial Loan Broker Association. Be the best Broker for your clients by becoming a member of the CLBA today at CLBAssociation.com.