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tagged: Brian Peart, Commercial Capital, commercial financing, commercial lending, commercial net branch, SBACan We Compete With the Banks?
Posted by admin in Brian's Blog, Commercial Real Estate, Tip Of The Week
I get asked this question a lot from brokers mostly, or insecure branches. They assume that if we are sending a deal to a bank, the client will be better off just going to the bank directly. In other words, they question whether we bring anything of value to the table at all. Let me tell you about a situation happening right now that kind of sheds the light on this topic.
I have a client Paul. Going to be opening a Firehouse Subs. I was first referred to him almost 8 months ago but he had to take care of a lawsuit and some other things before he was ready. As far as candidates go, he is probably the most qualified guy I have seen, in other words, of all the Firehouse deals I have closed, this guy was probably the strongest and hence, a “slam dunk” approval. Now a Firehouse Subs is a restaurant franchise and these loans are start-ups with no Real Estate. Most lenders/banks want collateral when they do these loans. There is one lender that does NOT require collateral on a start-up SBA 7A restaurant loan. That lender is the one I was going to put Paul through. I have a great relationship with that lender and particularly our rep and can get approvals in 48 hours with them. As luck would have it, when Paul was finally ready to move, I was on vacation. Instead of waiting for me, he applied directly with this lender because the area rep told him about them. So even though I followed up with the guy for 8 months, he bails on me the one week I take off. Bummer for me. But a bigger bummer for him!
I went ahead and got him approved elsewhere at a place that requires collateral, got him approved in 2 days. But of course, he wants the no collateral deal. He first applied with them 7 weeks ago and STILL IS NOT APPROVED!!!! Keep in mind, this is the easiest deal I have seen all year. If he would have waited until I got back, I would have had him approved 6 ½ weeks ago! The difference between me going direct to them wholesale and the experience he is having retail is NIGHT and DAY. You see, a good rep can make or break a deal. And we have some of the best reps at the various lenders we deal with. It really does make a difference. So here we are, 7 weeks later, it supposedly went into underwriting last week, it will be interesting if it does not get approved. If it doesn’t, I will still have the loan since I have him approved elsewhere. But Paul is SHOOTING himself for going direct and has told everyone up and down the chain at Firehouse about how much tougher his experience is going direct. The end result of this deal will be even more business for me whether they approve it or not. Keep in mind, I can often do deals with no points as well so from a client perspective, there is NO reason to not go with me. They will get the same rate and the same deal, just a lot better experience. 7 WEEKS difference on this one. That is a lot of time. We could have been closing it by now if he had waited until I got back and applied with me.
The truth is, as a broker in commercial, if you have good sources and reps you have a HUGE advantage over anyone else in your local marketplace. With banks still pre-dominantly sidelined, there is no reason not to be aggressively marketing-you can kill it in your local marketplace. The opportunity is huge to carve a niche out as the very best in your area. Will you jump on that opportunity today?
Brian
p.s. Remember, this is the final month that we will be taking in new net branches. After September, we will not be taking on any new branches so I can focus on building up the producers that I currently have and my own flourishing business. I would love to have you become part of the team-there is exciting stuff happening. The conduit market is opening up, new lending sources are coming back online, it is getting really exciting. To join me in changing the game in commercial, or to find out more about it, just call Seth Parr at 866-355-1244 or e-mail him at commercialseth@gmail.com. Don’t miss this once in a lifetime opportunity that ends this month! Call Seth today!
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So, what happens after September? If brokers come with good deals, will they be turned away?
Actually, we are not taking deals in from brokers now. We stopped taking deals in from brokers about a year ago. I personally will only do broker loans if they are a member of the commercialhotline.net or a net branch. Most of my closing volume is now my own marketing and referrals. You can send a deal in to one of my branches if you like or join the hotline. We just analyzed our closings and because they still wanted control and did not know what they were doing, most broker deals just did not close. It was a tactical decision…..