C laffy C onsulting & Business Services ​​
Commercial loans, business loan request packaging, presentation and  progress monitoring
Why use a commercial loan consultant?
1. A rapidly changing regulatory environment creates constant external pressures on institutions to change lending practices.  As well, internal pressures such as the institutions' availability of funds or the “appetite” for particular types of commercial loans can morph quickly. These variables create confusion and delay for even the most experienced borrowers. 

Changes to state and federal regulations create corresponding changes to the lending behavior of both local and regional institutions as they struggle to comply. Banks and other lending institutions are also bound by internal credit policies which take into account the individual characteristics of the company as well as the overall economy.  The banks must review, change and update these policies annually according to both economic conditions (external pressure) as well as the current financial condition of their institution (internal pressure). In order to confirm tight compliance, lenders are audited and reviewed continually by regulatory agencies. For the borrower, these pressures are not known and sometimes cause sudden modifications and limitations on money borrowed from even their most trusted lending source.

The Solution... A commercial loan broker, however, stays familiar with the practices of many banks and lending institutions. The consultant can better locate and access the right resources at the right time. They are not bound by the policies of one agency because they have access to many funding sources.

2. The ability of commercial borrowers to access localized information regarding loan pricing is very limited.  Therefore, the borrower is not able to engage in effective negotiation based on a thorough knowledge of the market.  Unlike residential mortgages and consumer loans, commercial loan rates are not published for general public review.

Each bank maintains its own pricing which is varied due to the economic environment, competitive forces in the local and regional marketplace, and finally, the current financial position of the particular lending institution. If a certain loan type or industry has become saturated within an institution's own portfolio of loans, the lender may raise the rates to discourage further loan growth in that area; regardless of the strength of the borrower. Each institution has only so much lending capacity and they must use those funds in a way to maintain diversity for the management of credit performance within diverse economies.

Commercial pricing is further influenced by the borrower strength, the structure and term of the loan, the collateral type, and the purpose. For instance, a real estate loan may provide lower rates as compared to a specialized equipment loan, or a loan for the purpose of cashing out equity may be priced higher than if loan funds were used for a purchase of real estate. Even if special promotional rates are published for the general public to see, it is generally only for loans within a narrow category with a very specific underwriting standard. By the time the borrowers are at the closing table, they may find that the rates and terms are different than the original quotes.

The Solution... A commercial broker will assemble a minimum amount of information that will enable your business to engage in a competitive bid process. This process ensures that your request will receive a possible pricing advantage from "competitive pressures" in the marketplace. That means BETTER PRICING and BETTER TERMS.

Commercial lending rates are not based on the same simple criteria as consumer loans, for example, credit bureau scores,  but a large array of complicated factors. Granted, sometimes commercial deals change in rate and term as a result of the underwriting process, but your commercial loan consultant will be able to keep these changes reasonable and in line with the general market.