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Frequently Asked Questions

Q: What advantage does Venture Commercial Mortgage give you?
A: Options-Connections-Expertise.  We will comparison shop the loan request with numerous lenders giving several options to choose from.  This saves the time and effort in looking and allows the borrower to choose the loan that best fits their needs.  We are working in the trenches everyday and know the best lenders at the lowest cost that best fits a loan request, again giving the choice and flexibility in choosing a loan.  We know what the lender is looking for and we know how to present the loan request to get the best deal possible.  Quality lenders recognize this added value, and many are willing to reduce their loan fee in order to accommodate the mortgage banker's compensation, resulting in no additional cost to the borrower

Q: What makes Venture different from other mortgage bankers?
A: Consulting-We provide predevelopment consulting services, which may include preparing feasibility analysis proformas, investor presentations, lender presentations and other related requests.

    Options-We always provide the borrower with various options as to make sure the client is getting the best deal available

    Honesty-We never promise something we cannot deliver.  When the borrower is working with us, they know we are always up front and never hide the truth

    Guidance-We guide the borrower throughout the loan process from the beginning to the end never leaving the borrower without assistance to complete the transaction 

    Commitment-We take a long term approach to the client relationship.  We see each client as a repeat customer and know by serving the client with integrity the first time, they will come back

    Ongoing Resource-We are a continuing resource for the client well after the transaction is closed.  We are available to answer questions the client may have on future or existing projects whether we are participating for a fee or not 

Q:What differentiates a commercial mortgage from a residential mortgage?
A: A residential mortgage is limited to as the name implies, "residential properties" no greater than four units per building, whereas, a commercial mortgage is utilized to secure financing for a wide-array of property types.  In addition, the residential loan process is essentially standardized through the use of guidelines established by Freddie Mac and Fannie Mae, while the commercial loan process can vary greatly from lender-to-lender.

Q: How long does the loan process usually take?
A: The typical residential mortgage takes around 45 days to close while the commercial loan process is more complicated and usually takes around 60 -120 days from start to finish.

Q: Is debt service coverage important for the approval of the commercial loan?
A: Yes, it is one of the key factors as to whether a commercial loan is approved.  Debt service coverage is the ratio of cash available (after all property expenses) for loan payments to the loan payment.  Most commercial lenders require a DSCR of 1.20:1 or higher for most property types.

Q: Why use a mortgage broker?
A: A top quality mortgage broker can help you navigate through the ever changing mortgage market and help you to identify and target the best opportunities.  This can easily save you much more than the broker's fee.  As a result of being "in the trenches" every single day of every single week, a good broker is at the cutting edge of what is being offered, of how far the envelope can be pushed, as well as the specific language beneficial to the borrower that has been successfully negotiated on other transactions, etc.

Q: What are the 10 biggest mistakes that a borrower tend to make?
A: It is common for businesses to need commercial loans both at the start-up phase and once the business is up and running for equipment, expansion, or special projects. To make the right impression and secure the loan you need, it is important to be aware of some common mistakes.

  1. Not thoroughly researching your options. You want to ensure that you have done your due diligence and reviewed commercial loan terms from different banks and other commercial lenders.

  2. Not selecting the best lawyer. You should hire a commercial real estate attorney -- one who is very experienced in negotiating the types of real estate loans you are seeking. This is not the time to go with a friend or sister-in-law who happens to be an attorney.

  3. Failing to have a definite plan. Lenders want to see that you have a plan in place for using the money. They also want to see a timeframe in which you anticipate completion of the planned project.

  4. Failing to have a business plan. It is always advantageous when seeking a loan, or any type of funding, to have a well-structured business plan that includes all of the necessary operating and financial data. For more information on business plans, see Ten Reasons You Need a Strong Business Plan and the AllBusiness.com Business Plan Center.

  5. Not having cash ready to put into the project. Before you apply for a commercial real estate loan, you need to make sure you have some available cash on hand. Commercial lenders want to see that you are investing your own money to cover a percentage of the project.

  6. Not reviewing your balance sheet. Before taking out a loan, you should review your balance sheet and analyze your cash flow and liabilities to make sure that while paying off the loan you will still have enough money to run the property properly. For more information, check out The Balance Sheet for Small Businesses.

  7. Failing to negotiate the best deal. This ties in closely with number two, regarding a competent real estate attorney who can help you negotiate the fine points when reviewing a commercial real estate loan offer.

  8. Going straight to a familiar lender. Yes, it is good to have a rapport with a lender, particularly when you need a loan. However, there are new real estate products offered constantly, and it is worth your time to check out some of the other possibilities before going straight to your favorite lender.

  9. Not checking with the SBA. It is always worthwhile to check with the Small Business Administration to see what loans they can help you attain and what advice they may offer.

  10. Not having your ducks in a row. Make sure you have all the documentation that the lender would expect, and be prepared to show why the property or project makes fiscal sense.