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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2007

Looking for Business? Take 4 Steps

Sourcing small-balance-commercial business takes a smart, professional approach

If you have decided to diversify and increase your product offerings, then you likely have already realized the value of crossing over to commercial brokering. Including products such as small-balance-commercial mortgages is the springboard to profit and credibility.

Investing the time to source business successfully is equally as important as the decision to diversify. A smart and professional approach to sourcing small-balance commercial business is a combination of expanding your brand, leveraging existing business, building strategic partnerships and simplifying your action plan.

Expand your brand

Developing your brand to include commercial is the first step in sourcing commercial business. Get the word out; add language to your materials saying that you now do commercial mortgages in addition to residential mortgages. This can help make you a “top of mind” broker for borrowers.

Include commercial in every touch point with customers and referral sources. Part of developing your brand may be to select a niche within commercial lending. Become an expert on a certain property type or cater to a particular type of borrower by researching the market and available lending programs that serve your defined niche.

If you would like to create direct mail or other marketing pieces but cannot afford an outside creative agency, some commercial lenders offer professionally designed, customizable pieces at little cost. Some lenders’ marketing support also might include sample letters, scripts and press releases.

Your Web site also can be a platform to leverage your commercial offerings. Use it not only to mention that you now offer commercial mortgages but also to share valuable information about commercial real estate and the loan process. Include tips about the process of purchasing or refinancing commercial properties, the types of documentation needed to close a loan and appraisal information for commercial properties.

Leverage existing business

The best source for finding potential borrowers is your current book of business. Start by contacting borrowers with whom you have worked previously. They are already familiar with your work ethic and likely will trust you with their commercial inquiries.

Look through your files to search for borrowers who already fit the commercial-borrower criteria. Talk to clients who are small-business-owners, review closed loans for full-doc borrowers, and search the real-estate-owned section of 1003 forms for refinancing opportunities.

Build strategic partnerships

Who you know can be a powerful tool in finding clients. Contacts such as real estate agents, certified public accountants, property appraisers and financial advisers can be essential in building your commercial-origination business.

Take your relationships to the next level and leverage your referral network for marketing opportunities that drive commercial leads. For example, team up with a Realtor for a co-op advertising campaign. Ask to be included in your partners’ newsletters and e-mail communications to their clients with mention of your commercial offerings. Co-host a seminar for prospective borrowers, presenting educational information about commercial-property investing and the benefits of getting into the market with financing options they may not know.

Remember that peers who you might sometimes consider competition (for example, with residential deals) actually can provide you with new leads. When loan officers for major banks know that you offer small-balance commercial mortgages, they are likely to send business your way — especially if your commercial product targets a market that their bank can not accommodate.

Begin by reaching out to key contacts at area banks and credit unions, being sure to highlight the value you bring to the table.

Simplify your action plan

When the time comes to seek new commercial prospects, having an action plan will help to narrow your approach — an important strategy for small-commercial loans.

Start by determining your target group of borrowers. What properties are your borrowers likely to have? What kind of loan are your borrowers looking for? What level of documentation are your ideal borrowers comfortable with providing (keep in mind that full-doc programs often feature more-flexible terms)? Will your borrowers need a quick turnaround on their loans?

Once you have your target group in mind, determine the lender or stable of lenders that will most closely meet your borrowers’ needs. Finding the right lender is pivotal in meeting your borrowers’ demands. Your lender also should help you transition smoothly from residential to commercial. Work with one whose lending process is easy to understand for you and your borrower.

Once you have the right lender, proactively search for commercial leads. Start by researching online real estate listings, purchasing lists from list vendors, contacting your chamber of commerce and looking through local directories. Ask your lender’s account managers what marketing and lead-sourcing resources they recommend.

By leveraging your expertise in the residential mortgage business with a savvy action plan for sourcing commercial leads and the right small-balance-commercial lender, adding commercial originations to your business will not be as daunting as it once seemed. Commercial loans are more accessible for you and your borrowers than ever before. You can be sure that the payoff in profitability is well worth the effort to become educated and to seek out small-balance-commercial deals.


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