The question might get asked, should you use of the services of a mortgage broker for your car wash loan? The question really should be, should you use a competent mortgage broker? Financial consultants, just like bankers, come in all shapes and sizes. New ones, old ones, experienced ones, inexperienced ones, good ones and not so good ones. It is a mortgage bankers job to acquire new business for the lender that he/she's employed with. It is a mortgage consultants job to get new business also. They both have competitive benefits and disadvantages.
A local bank can often give the best deal if you're only looking for the cheapest rate and points for origination. The local bank can also frequently agree a loan quicker since they may be geographically near to the property and know about the neighborhood and any competition. On the flip side, the bank might require a deposit relationship and a merchant account. In these instances, you may actually feel that you're in business with your local bank. Frequently if you are utilizing a local bank, you may have a short note, for example 5, 7 or 10 years. Think of it this way. In 5 years, you get to go thru the entire process again of getting a loan!
If you are applying directly to an SBA bank, there are different types although they are SBA banks. An SBA lender is a bank or non-bank lending institution which has been authorized by the SBA to lend capital where the government will guarantee the loan in the case of default. An SBA lender with PLP status (Preferred Lender) is frequently the best way to go as the loan generally does not have to be submitted thru the SBA. The bank will underwrite the loan, approve it and get an SBA case number.
What borrowers don't understand is some lending organizations and banks (be they SBA or conventional loans) are inclined to do loans whether there's either strong cash flow or ample collateral. How would you know if a lender is a cash flow lender or a collateral lender.
People also don't normally realize the greatest difference between a bank and a non-bank lender. Non-bank lenders nearly always are logically more liberal because they are not usually subject to banking rules from the FDIC and OCC. This makes a big difference.
The fact remains also that many banks and non-bank lending institutions prefer not to do certain asset classes and that can change from frequently. Special use properties (gas stations, hotels, restaurants, car washes) go in and out of favor with underwriters on a consistent basis. Sometimes they go out of favor because a bank has had too many losses in an asset class. Occasionally they go out of favor because they have too many in their loan portfolio. Frequently they go out of favor because they have a new chief credit officer that has got a personal bias towards a particular asset class. How would a borrower know any of these things?
A capable mortgage consultant will understand how to correctly package the loan and present it to a potential lender. Presentation is half the battle. Many borrowers present a very poor package for a commercial loan. Again, a good competent mortgage broker will know how to put together a good outline of the transaction, the usage of proceeds for the capital, the financial strength of the borrower (s), the personal credit of the borrower (s), the strength and desirability of the proposed collateral, the cash flow of the existing business or collateral and any pro forma projections for newer or start up businesses.
Competent mortgage brokers can make the process of procuring financing significantly simpler and expedite the loan. A good commercial broker will know and will have made contacts with multiple lending sources. They may also know when you should use a cash flow lender compared to to a collateral lender. They can also know when non-bank lenders will do transactions that banks might not consider.
A local bank can often give the best deal if you're only looking for the cheapest rate and points for origination. The local bank can also frequently agree a loan quicker since they may be geographically near to the property and know about the neighborhood and any competition. On the flip side, the bank might require a deposit relationship and a merchant account. In these instances, you may actually feel that you're in business with your local bank. Frequently if you are utilizing a local bank, you may have a short note, for example 5, 7 or 10 years. Think of it this way. In 5 years, you get to go thru the entire process again of getting a loan!
If you are applying directly to an SBA bank, there are different types although they are SBA banks. An SBA lender is a bank or non-bank lending institution which has been authorized by the SBA to lend capital where the government will guarantee the loan in the case of default. An SBA lender with PLP status (Preferred Lender) is frequently the best way to go as the loan generally does not have to be submitted thru the SBA. The bank will underwrite the loan, approve it and get an SBA case number.
What borrowers don't understand is some lending organizations and banks (be they SBA or conventional loans) are inclined to do loans whether there's either strong cash flow or ample collateral. How would you know if a lender is a cash flow lender or a collateral lender.
People also don't normally realize the greatest difference between a bank and a non-bank lender. Non-bank lenders nearly always are logically more liberal because they are not usually subject to banking rules from the FDIC and OCC. This makes a big difference.
The fact remains also that many banks and non-bank lending institutions prefer not to do certain asset classes and that can change from frequently. Special use properties (gas stations, hotels, restaurants, car washes) go in and out of favor with underwriters on a consistent basis. Sometimes they go out of favor because a bank has had too many losses in an asset class. Occasionally they go out of favor because they have too many in their loan portfolio. Frequently they go out of favor because they have a new chief credit officer that has got a personal bias towards a particular asset class. How would a borrower know any of these things?
A capable mortgage consultant will understand how to correctly package the loan and present it to a potential lender. Presentation is half the battle. Many borrowers present a very poor package for a commercial loan. Again, a good competent mortgage broker will know how to put together a good outline of the transaction, the usage of proceeds for the capital, the financial strength of the borrower (s), the personal credit of the borrower (s), the strength and desirability of the proposed collateral, the cash flow of the existing business or collateral and any pro forma projections for newer or start up businesses.
Competent mortgage brokers can make the process of procuring financing significantly simpler and expedite the loan. A good commercial broker will know and will have made contacts with multiple lending sources. They may also know when you should use a cash flow lender compared to to a collateral lender. They can also know when non-bank lenders will do transactions that banks might not consider.
About the Author:
Harold Jaynes has specizlied in doing gas station, convenience store and car wash financing since the late nineties. If you're interested in car wash loans, visit their website and learn about all your available options.
No comments:
Post a Comment