Because of the varied forms of commercial mortgage lenders, a commercial entity has a few more options when trying secure capital, rather than just one option. This encourages free enterprise and allows for many more entrepreneurs to remain competitive.

Commercial mortgage lenders have total control and can make whatever decision they like. This is what makes them far more versatile than banks. Finding a good professional lender is important and you must try to find one who understands your business in order to give you a loan type that will best suit your requirements.

For many borrowers the answer has been private lending. Privately funded, often called “hard money” commercial mortgage loans are funded by private individuals or privately held companies. These unique commercial mortgage lenders often hold the loans they write in their own portfolios rather than sell them to the secondary mortgage bond market. Private lenders are not regulated by the State or Federal Government so they enjoy much more flexibility and can fund loans much faster than banks can. Multi-million dollar loans can close in less than 10 days if the deal works for the hard money lender.

Bottom line, Wall Street’s seems unable to distinguish between the residential subprime mortgage mess and any other mortgage back securities - like commercial mortgages. It’s widely agreed that that Wall Street and the credit ratings agencies have simply overreacted and commercial mortgage lenders such as Lehman, Bayview, Silverhill, Interbay, and Velocity have fell victim to “guilt by association”.

In a commercial mortgage, the liability for defaulting on your payments is restricted to the property pledged as collateral. As a result, money lenders have very stringent conditions before they will consider sanctioning a new loan. Usually this decision is made under the watchful eye of seasoned professional with a strong track record in successfully navigating the aggressive and dangerous capital markets.

Different Commercial Mortgage lenders also have different stipulations regarding how much documentation you’ll need to provide–both before and after the loan is closed. You may have to pull docs out of your nose; you may be bound to give quarterly reports after the loan is closed, with penalties including possible default if you fail to do this. Make sure you know all about these stipulations before you sign on any bottom lines. If one lender isn’t to your liking, talk to another (once again, using a broker can really streamline this process for you if extra cost is no obstacle to you).

This article has been written by the author, Tiens. Should you require any morecommercial mortgage lendersplease visit his commercial second mortgage resources!

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