Work with one or more portfolio lenders???

Question

Bryan O. · Answer

@Kyle Godbout another consideration is if that bank/credit union decides they do not want to be in that space anymore. They aren't selling those loans off, so they may just not want to renew down the road. I think it is good to have another in your back pocket as risk mitigation.

Dustin Lauer · Answer

You should always do what is best for your business and your family.  Also if you raise any of the money that you invest, then you owe it to your equity partners to make sure you are doing the best you can for everyone's investment.  Using one lender is great for what you mentioned, but it's also great for accounting, servicing, and the management of your business.  Using multiple is great also as many (other) lenders will not always price as aggressively as they could afford to earn your business.

Travis Russell · Answer

Kyle,

There are benefits and drawbacks to using one portfolio lender and benefits to using multiple lenders.  The benefit to using one lender is they know you, how you operate your business, and already have all of your financial information.  This usually leads to quicker and approved loan decisions.  The drawback of using one portfolio lender, depending on the portfolio lender you are using, is the more you borrow from one lender the longer the approval process can take due to the amount of outstanding loans you have with the lender.  The dollar amount and approval time will vary depending on the lender.

If you decide to go with a second portfolio lender you will have to submit your financial information again and have to get to know a new lender and their process.  This could result in a positive or negative experience based on the lender you are working with.

In summary, if you find that the approval process is taking too long with your current lender or you a reach a lending limit with your current lender then it might be worth it to try another lender.  I don't think you can go wrong either way.

Travis

Work with one or more portfolio lenders???

Most Popular Reply