10/3/08 Relationship Banking is Key - Tough Times Require Creativity, here is a trick in today's market: The most frequent question I am asked daily, often hourly is how to get better pricing for a client? This market is always ever changing. It seems recently guidelines, policies, advances in risk & overall lending practices for commercial lenders seem to change almost as rapidly as the weather in the mid-west! So to answer the most popular question currently, how does a broker/agent help secure the best pricing available on commercial real estate in this current market, where many borrowers are simply fortunate to obtain a loan, let alone have the ability to negotiate rate? Relationship banking is KEY. A business owner that can move his operating accounts to a community bank has many advantages. For the business owner, he will gain understanding from his bank about his business, its cycles, history and future based on past cycles. In return the community bank housing the business owner’s deposits will gain funds cheaper than purchasing through an interest bearing certificate of deposit or by purchasing through the federal government. This is a win-win situation for all involved. Business owners have the greatest advantage in this current market to build a relationship with a community bank and have the flexibility they would not otherwise have being simply “a number in a box” with many larger banks. Keep the above information in mind for your clients that own their own businesses and are looking to secure financing for commercial real estate. Also, don’t forget for your client with a property that is 51% ore more occupied by the owner’s business, many of these client’s qualify for the SBA 504 loan which allows up to 90% loan to value on commercial real estate purchases. This is a fantastic product in a market where many business owners are struggling to achieve even 50% Loan to value on many commercial properties! For
those of you afraid of “losing” your client if you assist
them in creating a relationship with a bank, keep in mind, if you
maintain your client relationship and always are the one initiating
the next loan for your client, you will be able to earn on future
lending as long as you open the dialogue for the new loan through
the existing bank. For
more information please feel free to contact me. |
