How to conquer the Top 5 Reasons Your Commercial Loans Don’t Close
1. without of Loan course of action Transparency
Most lenders have a loan officer who hands your initial loan package to an analyst or underwriter over whom you have very little control. Typically, your package just disappears behind a hidden bureaucratic wall, leaving you to wait and surprise about the disposition of your loan package.
Solution: Built on the concept of Transparency, Capital Development has developed the optimal paradigm to manage the 65+ documents that make up a typical commercial loan package. Employing a proprietary and obtain online document management system called eDocLending(TM), we examine each document and set up your loan package online, so you or your borrower can directly access a Tracking Page. This page immediately discloses any missing documents required to improvement the loan toward closing. You follow the progress of your loan by every stage of processing, so you can rest assured it precisely depicts your loan’s position on a real-time basis. Furthermore, Wholesale Brokers are issued a rare Tracking Number for every eDocLending(TM) Loan Package.
2. Deficient Pre-Screening & Fine Tuning
Most traditional lenders can only Pre-Screen based on their limited in-house loan programs, and many without the flexibility to actively go into the loan structuring course of action. They also gloss by the application and don’t take the time to work with the Broker to fine tune the package before passing it on to an analyst. This without of flexibility and fine tuning from other lenders often results in delays throughout the approval course of action, potentially worse terms and conditions than what the borrower would be able to qualify for, and already prevent the loan from closing due to a without of basic information.
Solution: Capital Development pre-screens your loan scenario–from the decision maker’s standpoint. Our AEs will guide and help structure your loan, steering you away from possible pitfalls and providing answers our competitors generally struggle to determine. Our credit box also has considerably fewer limitations, since it’s based on the aggregate collection of the complete Commercial Secondary Market.
3. Generic Loan Proposals
Regrettably, many lenders issue generic proposals or term sheets with an unrealistic rate quote due to deficient pre-screening requests. After investing your client’s time and money in underwriting, the terms provided at funding are less attractive. This traps you and your borrower into a high cost, low value loan package. It’s dangerous to include a lender who issues anything less than a proposal based on an accurate examination.
Solution: Pledging transparency and integrity, Capital Development provides detailed Pre-Approval Letters with terms and conditions that carry by to closing. Selecting a lender should be based on the final terms and conditions the borrower will have to live with, especially given the long-term character of long-lasting financing. Capital Development is a high-value lender defined by wholesale loan programs and interest rates, coupled with the thorough commitment to close your loan as advertised.
4. Vague Timelines or how “Time Kills Deals”
Closing by an agreed-upon deadline should be equally important to everyone involved. Unfortunately, committing to a deadline is almost impossible for most lenders. This is because their internal communication is limited, and they must rely on people within their organization over whom they have no control. While delays typically only minimally impact a lender, already slight delays can be extreme to a borrower. Here’s the often too-familiar scenario: Borrower (buyer) has a character under contract at a popular price, the time of action has drawn out and the seller is eager to let the contract expire in to sell the character to a backup buyer willing to pay more for the character. In this situation, the buyer is often faced with losing earnest money deposited in the time of action. This unfortunate position also has long-term implications and makes it very difficult for borrowers to make smart decisions. In short: “Time Kills Deals.”
Solution: The only way to meet any timeline is by open communication with the broker and the borrower. Capital Development tracks duration data for every loan document in every loan package it assembles. We have developed our timeline based on an extensive database of information. The timeline we send–after the borrower accepts the terms of our Pre-Approval Letter–is incorporated into the Tracking Page and into our system. This ensures that dates are observed automatically, triggering daily email notifications that keep everyone focused on closing by the agreed upon deadline.
5. Unreliable Document Tracking and Communication
It may take as many as 100 documents to close a single commercial real estate loan. Without an organized database supplemented with open and consistent communication between all parties, many viable commercial loan requests don’t make it to closing. Poor communication by the lender fails-at the very least-to provide a good return on investment for the time and money spent by either broker or borrower. The one-shot call with empty promises simply doesn’t get the job done anymore. If your lender is not providing consistent communication about the position of your loan, and missing documentation, you might in addition throw your time and money down the drain.
Solution: Our online Tracking Page is obtainable 24/7 to all Wholesale Brokers. Just like FedEx or UPS – with Capital Development, you’ll always know where your package is!
Capital Development has systematically broken down the loan course of action into five clear stages to ensure your loan package will close successfully. We’re committed to only issuing Pre-Approval Letters that have a high probability of truly closing. We will quickly estimate the viability of any loan scenario, but we will never attempt to “get control of a deal, and then see if it makes sense.” One of our Account Executives and/or Closing Specialists will be in direct contact with you during all stages of our course of action:
* Stage 1 Pre-Screen- Our no-obligation comprehensive pre-screening;
* Stage 2 Pre-Approval- Issue the Pre-Approval Letter designed to close;
* Stage 3 Underwriting- Coordinating and expediting matters for credit review;
* Stage 4 Commitment- Commitment letter issued;
* Stage 5 Closing- Clearing conditions and funding the loan request