How to Prepare Your Commercial Mortgage Deal for a Non-Bank Lender

Commercial mortgage brokers have a wide variety of options available to them when trying to secure funding for their clients. Originators should certainly develop relationships with traditional bank lenders – these options are usually a great fit for creditworthy borrowers who are able to fit bank guidelines.

However, originators should also create relationships with alternative lending sources so they can capture more business. Non-bank lenders are more likely to offer greater flexibility and fewer restrictions – these characteristics can make all the difference for an originator looking to find an alternative solution for their borrower.

It should be noted here that, while non-bank lenders generally do offer an increased amount of flexibility during the application process, they will still have guidelines in place for originators and their clients to follow. The more closely you follow these guidelines, the more likely you are to secure an approval for your borrower’s application.

If you’re considering a non-bank lender for your borrower’s needs, here are a few general tips for preparing your package:


#1. Send as Much Information as Possible

One of the benefits of working with a non-bank lender is the fact that many offer reduced, or even “no doc” loan options. These solutions lift the barrier of entry for many borrowers.

The tradeoff is that borrowers who share less information give lenders less to work with as they prepare their approval decision.

The more documentation a borrower provides at the start of a transaction, the easier it is for a non-bank lender to review the scenario and determine its viability. If your client is able to produce the required documentation, it may be a good idea to encourage them to do so.

Then, even if a lender determines that a prospective borrower does not qualify for a specific program, they can use the information provided to find a different solution that could still meet the borrower’s needs.

In addition to the required documentation, it’s important to prep the lender for any hiccups or hurdles you foresee. Doing this at the beginning can help determine if the loan options are a good fit for the borrower and if the deal will have any difficulty closing.


#2. Clearly Describe the Borrower’s Motivation

Understanding your borrower’s motivation and sharing that with the lender is vital to ensure they are presented with the best possible solution.

Non-bank lenders often have a variety of loan programs that could work for your borrower’s scenario. If they have a firm understanding of your client’s short and long-term financial objectives, they can cut through the clutter with a loan program that meets the greatest number of your borrower’s needs.


#3. Understand the Deal

Brokers should also do a bit of underwriting themselves to really understand the deal before submitting it to a non-bank lender. Make sure you’re able to determine how the borrower plans to service the debt over the life of their loan.

Doing this small amount of research can be greatly beneficial when preparing to submit your deal to a non-bank lender, as the lender will have much more clarity on the risk associated with the deal.

This practice may also help you quickly disqualify certain lender options and focus on those loan options that are more likely to be approved.


Small-Balance Commercial Mortgage Resources

If you’re considering non-bank lenders for your borrowers, be sure to explore Silver Hill Funding, LLC.

When you create your free online account, you’ll gain immediate access to our Broker Portal, which includes our Silver Qualifier Mortgage Calculator. This tool can help you determine the rate, margin, and estimated monthly payments for your clients’ deals.


*Results of this calculator and any generated term sheets are intended for estimation only. This is not an approval or commitment to lend and only intended to provide a broad estimation. Actual payments and interest rates will be calculated by Silver Hill after submission of a loan application and all other required documentation. Silver Hill Funding programs are offered to qualified commercial lending institutions and are not applicable to the general public and/or individual consumers. This information is for lending institutions only, and not intended for use by individual consumers or borrowers. Programs may be cancelled or modified at any time without prior notice. Programs may not be available in all jurisdictions.