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Commercial Loan Brokering

As a commercial loan broker we can attest to how great of a business this can be. The commercial loan broker can enjoy a truly uncapped income potential as some of the better brokers enjoy 7 figure incomes, freedom of schedule and get to work with highly sophisticated borrowers. With these benefits, and others, it’s no surprise that so many residential loan officers are making an attempt to break into the business.There are a few major skill sets that are needed. For example the ability to screen deals quickly and efficiently is one of the more important ones. The commercial loan broker needs to be able to assess the viability of deals immediately. The reality of the business is that many of the loans you will look at will not be able to close. And it is very easy to waste countless hours on loan requests that have zero chance of closing in the first place.Secondly, commercial loan brokers need to know the intricacies of lenders to have a better idea if the loan really fits their appetite. It can be very frustrating to place a deal, have the borrower sign the term sheet and send in the deposit check only to have the bank, 2 months into process, pass on the loan. This can be avoided most of the time if you really know what the bank likes.Reading tax returns in an attempt to better understand the income of the borrower and or business can become extremely complicated and an essential skill. There is definitely an “art” to reporting income and reading tax returns. Learning how to sit down with a package and go through the numbers is critical. Lack of income is one of the main reasons why a loan may be impossible to close.On owner occupied transactions brokers need to know how to assess the “global income” which is basically looking at all income, both business and personal and all expenses, again both business and personal on the borrower. Depending on the size of the business or better said, size of the tax returns, this can be a little more complicated as business and personal expenses can become intertwined and or reported twice.