The main reason is that lenders are seeing an overwhelming number of financing requests. The reduced number of commercial banks in the lending business has overburdened private lenders while also presenting them with grade-A borrowers.

This further exacerbates the borrowers' predicament. Their project presentations must now be pristine and extremely professional to garner funding sources' attention. Borrowers also must have significant prior experience in developing similar projects, and those developments should have positive histories.

The executive summary that provides the project overview should be comprehensive. It must establish the project's credibility, its location, the developer, the current business and economic environment, and the benefits that the project will bring to the surrounding area upon completion. Any forms of community and local support in the form of tax incentives, credits or rebates should be included to emphasize local support for the project. This information should be compiled into a compelling narrative that includes financial justification of its most-salient points.

Although today's developers often are not dealing with traditional commercial banks, the documentation that is requested will most likely be similar. This is true despite the consideration that private money may often include hard-money rates and fees.

These funding sources often have too many potential clients available to them to sacrifice their profits to secure a particular transaction. This excess supply of borrowers over the limited supply of money allows today's private-funding sources to maximize their returns without significantly increasing their exposure by financing riskier clients and projects.

With this lending shift, developers are realizing the importance of partnering with a knowledgeable commercial mortgage broker. To add value to their service offerings, brokers should determine the best funding sources for their clients' particular projects.

Most private lenders are selective when considering project types. Further, their preferences may change frequently as they seek to diversify their own portfolios.

Keeping up with what projects are being funded, as well as by whom and when, can be a full-time undertaking. It requires constant contact with lenders and an awareness of industry trends and projections. These are activities that most developers are not even aware that they should perform.

Commercial brokers who can tap into the appropriate funding sources and who have the required knowledge to develop powerful and effective presentations will therefore become extremely well-regarded and well-rewarded in developer clients' eyes.

Milton Franklin is president and CEO of Nationwide Business Consultants of South Florida Inc., which maintains direct relationships with all types of nontraditional funding sources and tax-incentive consultants. Nationwide offers a full range of creative financing products and services to commercial clients, in addition to partnering opportunities for commercial mortgage brokers and project funders. A graduate of Wharton Business School, Franklin has 25 years' experience in financial services. Reach him at (786) 506-3578 or miltonfranklin@gmail.com.

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