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Kaplan: Online lending sites make getting a commercial real estate loan easier

Published: Wednesday, Aug. 28, 2013 5:30 a.m. CDT

Lending Tree is a residential loan platform where lenders “compete” for your loan. It started the online lending revolution.

Recently, I was introduced to a world of online lending platforms for commercial real estate and general business loans. This group of companies is redefining how commercial loans get done. The following list is not complete, but these players are the ones defining the online lending space.

Of the companies I’ve encountered, www.c-loans.com is the only company aimed squarely at commercial lending on a national scale. The platform is more of a lending database that lists the lenders compatible with the kind of loan needed. It’s free to use and targets the end borrower.

The next you’ll come across is www.lendio.com. Lendio starts to stretch the boundaries of loan type with everything from lines of credit to commercial real estate loans. It’s program will list local lenders who have an appetite for a particular type of loans and is aimed at end borrowers. 

The next stop on the list is www.boefly.com. This program is in the same vein as Lendio, but a calculator on the home page gives end borrowers an interactive tool to engage with and start the request.

Then comes www.matchfinance.com. This site is in the space of finding borrowers a likely lender to match their needs. They have multiple loan types and are focused on the borrowers.

The new kid, www.connectlending.com, is in the space of finding loans that correspond with a lender’s needs, but their twist is they focus on the interaction with the advisers (brokers). Connect Lending goes one further, and also shares a percent of its income generated on the deal with the advisers. This is one feature I found very interesting when comparing the lot.

Each of these programs has amassed a few hundred, if not a few thousand, select lenders who compete for commercial real estate loan business, which is starting to change the lending landscape.

The traditional method of going to a bank, filling out tedious applications and submitting tons of paperwork only to get denied four to eight weeks later has been replaced by a much more efficient system.

The online lending approach starts with filling out a survey regarding your business loan requirement. Using proprietary software, each of the systems analyzes your responses and matches you with a lender that has “pre-approved” your situation.

Within a few days, if not hours, of submitting your questionnaire, you are contacted by lenders who will ask follow-up questions and wrap up the loan details. These lenders are still going to want to see such documents as tax returns (personal and business), financial statements and credit reports. Depending upon the type of loan product, you can expect loan funding within three to six weeks after all documentation is submitted.

One of the features of these sites, is the revolutionary loan process where there are no upfront fees to submit an application.

Many banks today are back in the market to lend money to qualified buyers, but it’s finding the right partners at the right time that’s still tricky.

Because of the down economy in the past five years, many people have had damaged credit. Bad credit scores (under 700 FICO score) will trip you up if you apply for a loan just about anywhere.

Connect Lending, I believe, is the only one that has an arm of the company dedicated to helping fix your credit score so you can eventually qualify for a loan. I don’t think your current personal banker will do that for you.

I don’t want to tell you to steer away from your current business bank if you have a good relationship and they want to lend you money at a competitive rate. But let’s face it, not every bank is eager to make commercial real estate loans with fair rates and terms. Too many banks have been burned with poor performing loans and the federal regulators have held them back from making new loans to customers.

Using some of the options above can actually keep your current banker honest if they have to compete for your business.

If there is any takeaway from this article to be had, please know the market has started to turn and some lenders are rich with cash they want to lend at still very attractive interest rates.

If you are not getting the right attitude from your current banking relationship and you need to explore a commercial real estate or other business loan, feel free to contact me.

• Bruce Kaplan is a senior broker associate with Premier Commercial Realty in Lake in the Hills. He can be reached at brucek@profit-success.net or www.profit-success.net. 

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