Non Bank Lenders v Banks

Non Bank Lenders: Gone are the good old days when we could pick up the phone or better yet walk in to our local community bank and request a loan.

In today’s challenging marketplace, it’s imperative to get to know your lenders if you want them to take you seriously. Refrain from submitting deals that do not meet their investment criteria. Secure your lenders first, then educate and sell to your clients.

So how do you work with non bank lenders?

Select an industry focus – Advisers love to be able to accommodate all of their client’s requests but the reality is that we cannot advise a client comprehensively in every aspect of the finance industry. Choose three or four and focus on building your non bank lender database in these areas i.e. commercial property, hospitality, tech start-ups, equip leasing, bad credit etc.

Build your lender list

With specific industries chosen you can begin to build your list of proven lenders. Start with the lenders in your community. The local banks will be a great resource in providing detailed information on what they will and will not lend on. Get specifics i.e. loan to cost ratios for construction projects, annual sales required for lines of credit etc. Once you have this information from a few local banks, start prospecting finance companies.  Make sure your list is scalable to 5 lenders per industry sector. Once you know lenders criteria, there’s no reason to send the same file to 20 different sources.

Meet with each lender – This may seem like an arduous task but taking the time now to meet with each lender has many advantages. For instance, aren’t you more likely to return the phone call of someone you’ve recently met as opposed to a cold call? Of course you are! We like doing business with friends. If a meeting in person isn’t feasible, then find out when your lender is available for 30 minutes. You have to get to know them as well as their businesses.

Vet your lender – Coming out of a financial period where practically everyone was calling themselves a lender, it’s important to know the types of deals your lender has closed. The simplest way is to ask. Then confirm on your own.

Source clients – Obviously there are a multitude of ways to attract new business. The first and foremost is having a web presence that tells your company’s’ story. Let potential clients know the industry sectors that are your strengths. Once you have a corporate website, you can go back to the banks that you’ve established a relationship with and notify them that you have lenders that can assist with loans that they turn down.

Working with private lenders is very different from institutional ones, it’s more personal. Get to know what your lenders want and you’ll be on your way to helping your clients obtain the financing they need.

Low Doc Mortgages can assist by securing funding in the commercial real estate sector.