Commercial Lenders in CT

[Daniel Orlowski]

I need advice on how to get a good commercial lender in Connecticut? I am looking in the New Haven/Middletown/Waterbury area. Does anyone know the best way to get commercial financing.

[Scott Hollister]

Hello @Daniel Orlowski,

My best advice is going to your local meet-up and asking for recommendations. Real estate is a relationship business, referrals are the best way to get a quality commercial lender. (Our next meet-up is this Tuesday) If Manchester CT isn't too far of a drive, we regularly have a few commercial lenders who also invest themselves. 

The best way to get commercial financing is to understand the terms and underwriting process. Typically, single family homes are valued off the comparison approach to determine value. Commercial properties are typically valued off of the income approach and use terms like Debt Service Coverage Ratio (Typically the minimum is 1.2) and CAP rate (Return on your investment if you paid all cash). Commercial financing is a different field, understand it, educate yourself, and network.

You will also "need" 20-25% down with reserves based on the property. 

Typically you will see these in a loan package:

• Executive summary
• Appraisal
• Financial statement
• Credit report
• sponsor financial statement
• property financials
• borrower resume
• Purchase and sale agreement
• legal description of the property
• photographes
• map location
• environmental information (Understand phase 1 and phase 2 terms)
• property management documents

Best of success!