Doing Commercial Loans
Posted 28 July 2004 - 02:27 AM
1. Do I have to obtain separete licensing for commercial loans or can I work off the one I have?
2. Is it true that some states don't require any license at all to do commercial loans?
3. What would be some negatives about the commercial business?
Is there a helpful website that can give me information on doing commercial loans?
Any information is greatly appreciated.
Posted 28 July 2004 - 07:59 AM
I can’t really speak to licensing issues, maybe one of the non-bank lenders here can give you some feedback on those points. However, if I had to pick something to say about commercial lending to someone coming from a residential lending background, I would say the following:
- Commercial loans are usually custom products. There is no 15-year and 30-year standard.
- When you start talking about bigger deals, credit score is not enough. You will need to get people with the skills and experience to underwrite the loans or quality might suffer.
- I assume that the plan is to expand into commercial real estate lending and stay away from business financing? If you do decide to offer a full spectrum of commercial loans that would need even more expertise.
- Even if you decide to keep your entry to commercial lending limited to commercial real estate, sometimes you will need to analyze the company/tenant. Specially if you have an owner occupied property.
- I think it would be fair to say that the secondary market for commercial loans is less liquid than that for residential loans. This brings the question of “can you fund those loans yourself?”.
- You can certainly improve your yield with commercial loans, but remember that the risk/reward relationship holds true.
The following are a couple of sites that have information about the tools used. Moody’s financial analyst is pretty much the standard for spreading financial information, and Omega has a great series of training books that are usually given to people at the start of their commercial lending careers. They are both on the pricey side so you might just want to wait and see if you want to get into the business first.
Omega Training products
Posted 07 August 2004 - 11:09 PM
Posted 10 August 2004 - 02:57 PM
Posted 20 August 2004 - 03:39 PM
Posted 20 August 2004 - 06:29 PM
Naj is right, you know that saying something like “he gets all of his prospects from brokers” is actually a derogatory comment about a commercial lender in some circles of the banking industry. There is an aura of shady dealings around the profession, which can be looked at as an opportunity.
Posted 27 August 2004 - 03:24 PM
my company just hired an expert on commercial deals just for this reason. We do
mortgages nationwide but have been mostly residential. now we have an expert who
can help us get the cmmercial deals together.
If you need us we can cobroker your deals until you are ready to do them on your own.
We just sign an agreement and our guy will do the work and you will get paid at closing.
Email me email@example.com if you need me,
Posted 27 August 2004 - 07:24 PM
Posted 04 January 2006 - 06:19 PM
Posted 06 January 2006 - 11:53 PM
Posted 07 January 2006 - 12:22 AM
What about Texas? If I wanted to start brokering commercial loans would I need to have a physical office in Texas? Please let us know.
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