A commercial mortgage approval ultimately means showing that you have enough collateral to support repayment. Collateral is a borrower’s promise with property, to secure repayment of a loan. Your business, not yourself, assumes the mortgage and it can be a complex process. A business may seek out a commercial mortgage approval for different reasons. These may be property development, a new office, renovations on an existing commercial property, or other investments.
The Government of Canada’s recent report states that small businesses received 63,000 loans and over $9.5 billion in asset-based financing in the last 10 years. This is because most businesses need financing.
Here are the 5 steps you’ll take in obtaining mortgage approval.
5 Steps to Obtaining Commercial Mortgage Approval
1. Assess the project together
As we assess the details of the project together, the information I gather determines the possibility of obtaining a mortgage from a potential lender. I have access to a multitude of lenders and I hope to find the perfect match for you.
2. Enter into an Agreement
Next, we enter into an agreement together. This agreement is expressed in a letter of understanding or a simple verbal contract. Here, we establish my compensation and collecting more information needed to complete the commercial mortgage approval process.
3. Build a portfolio
Your portfolio includes an overview of your personal and business financials. We assess your corporation, any present loans, and all notice of assessments, appraisal, reports, surveys, etc.
4. Compile information and Present it to Potential Lenders.
Any interested potential lenders provide either a discussion paper or a letter of intent. These documents list conditions to fulfill before giving a commitment to the borrower. Furthermore, the lender issues a commitment based on the information provided in the portfolio.
5. Commitment is issued.
When the commitment is issued, the mortgage lawyers take over. During this step, they prepare the proper documents, finalize the closing, and dispense all necessary disbursements.
Commercial Mortgage Approval With a Mortgage Broker
Ultimately, Mortgage approval is best achieved with a mortgage broker. Out of the many types of commercial mortgage loans, the most common I work with are construction loans. I also refinance completed construction loans and occasionally have the opportunity to find my clients a better commercial mortgage that they presently have.
I have keys to obtaining commercial mortgage approval. As a licensed agent with Unimor Capital Corporation, I offer my clients access to many banks, financial institutions, and private lenders. I am also licensed by the Financial Services Commission of Ontario requiring me to disclose my compensation in writing to you.