Commercial Finance | 7 Trends in Commercial Lending and Commercial Finance
After the market crash, lenders are looking for smarter investments. As someone hoping to invest, it’s in your best interests to find a property that is ahead of the curve – a company that commercial finance lenders know will be successful not only this year, but 5 or 10 years down the road. It’s also important to find a lender that is willing to work with that property.
There are trends in commercial finance that borrowers should be aware of when searching for a property. Some of these trends include:
- Amenities + Amenities – In multifamily housing real estate, more and more renters are looking for amenities. Apartment complexes with pools, fitness rooms, business centers, a high tech washer/dryer and more are the ones that seem to be in frequent high demand with no chance of decreasing.
- Story Lending – Stories are becoming more important than ever with commercial finance. While all of your on-paper work matter, lenders want to know who you are, what you stand for, and what your plans are. They want to know you and the business you plan to create.
- Low Price With Great Net Operating Income – Price for renters of commercial property spaces (like office spaces) is growing in importance. Companies that can provide cheaper prices while still holding onto a great property with a Net Operating Income of at least 1.2 are more likely to be funded than luxury rentals.
- Potential is in the Past – No longer do commercial finance lenders care about a property’s potential. They are funding results. Indeed, some properties need to have a 90% residency rate before they can even qualify for a loan.
- Wholesale Lending is on the Rise – In the past, borrowers were hesitant to use mortgage brokers. But now, because brokers are better licensed/regulated and because brokers can often provide lower cost funding, the fees are lower, and the work for the borrower is reduced.
- Customizable Financing is Possible – Properties that may have some ups and downs can now find lenders that offer more flexible styles of commercial finance, with similar costs but a structure that makes sense for your business’s needs.
- Looks Still Matter – While far more lenders are looking at numbers over pictures, lenders are much more likely now to try to use their expertise to decide who is right for a loan, and that means that lenders are hoping to see modern, clean, and in demand properties.
Borrowing is harder than ever before, but only because lenders are being more careful. The money is still there, and lenders still want to provide it.
At CRE Lender, we analyze over 45,000 lending sources in real time and help turn loan applications into formal underwriting so that you are able to close on your loan quickly. Find out if your property is the right property for you, and if lenders are willing to fund it by signing up with CRE Lender today.
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