New Sources for New Business
Investment bankers may be a good funding option for mortgage brokers and their clients
By Andrew Bogdanoff, president, Remington Financial Group
Although top-tier banks
have slowed credit issuance, experienced mortgage brokers understand that funds are still available for those
who know where to look.
Some brokers who have customarily secured funding through traditional
banks are finding success by developing
relationships with investment bankers that
have private, proprietary lending sources.
These lending partners typically are more
flexible than traditional banks when determining where to place their funds and
therefore often can assist a wider variety
of borrowers.
In addition, they often have money available to lend for reputable commercial deals
when traditional lending sources do not.
Keep in mind, too, that many investment banks have secured funding for borrowers who have been turned down by
other institutions. Because of this, these
funding sources are well-versed at finding investment dollars for borrowers who
have had trouble getting money elsewhere.
Such problems often arise because the
borrowers:
■ Have questionable credit;
■ Are a small business and viewed as
risky by larger banks; or
■ Are dealing with financial institutions
that don’t have the ability to lend.
Choose a partner
Brokers who move beyond the idea that
mortgage funding can come only from
traditional banks can better maintain
their current business and even find new
opportunities. There are some key things
to look for when investigating investment-banking partnerships.
An ideal investment-banking partner
will have considerable financial experience.
Brokers should understand how long their
potential partners have been in business
and for what types of deals they have secured funding.
Many of these private lenders specialize in a particular kind of loan. Brokers,
however, often will be better-served by
building rapport with a company that can
find financing for several loan types. This
additional layer of practical knowledge will
give you confidence that your customers
will be well-served regardless of the type
of loan they require. Finding a company
that has a deep knowledge of mezzanine,
hard-money, construction, bridge and
other types of loans is necessary.
Also try to understand more about
these companies’ potential funding
sources. Ask how long they have partnered
with their investors and on what type of
deals. This information will help you build
confidence that you and your clients are in
good hands.
Help new clients
It’s not just borrowers with some kind of
“blip” in their background (e.g., a credit
problem or a lack of experience with a particular property type) who are having trouble securing funding. Today, even the crème
de la crème of the borrowing community is
having a harder time getting a loan.
Keep your eyes open for opportunities to
help borrowers you might not have otherwise considered. Your regular clientele will
still need your help and guidance to secure
funding and push deals through, but so will
this new crop of valuable borrowers. By creating a relationship with a reputable investment banker, you can close more deals that
make money for all parties.
Creating a strong relationship with a
high-quality investment-banking company
can help you confidently connect your clients with a lending base they might not
have otherwise known about. Such moves
also can help you feel more secure about
your own business’s future.
Andrew Bogdanoff has
more than 35 years’ commercial lending experience
and founded Remington
Financial Group in 1993.
He has served as the company’s president since its
inception, and under his leadership, the company has grown to a closed-transaction rate of
well in excess of $5 billion. Reach Bogdanoff
at andy@remingtonfg.com. For more information on Remington Financial Group, visit
remingtonfg.com.
