Getting a commercial mortgage loan in Maryland can seem daunting, especially for small business owners who are just setting foot in the commercial real estate market for the first time. One of the biggest causes for stress is simply the fact that for many people, a commercial mortgage is the single largest loan they will ever take out in their lives. More than that, however, the process of obtaining a commercial real estate loan can be convoluted, long, and very involved.
One way to make the process much easier is to get your loan from local banks v. national banks or regional chains. There are many advantages for choosing to pursue a commercial mortgage loan from a Maryland community bank instead of a larger bank. All of them can make the process significantly easier to navigate, and end up saving you time and money.
When you apply for a commercial real estate loan from a large bank, the person you will be dealing with on a daily basis is rarely the same as the person who ends up approving or denying your loan.
In fact, it’s highly unlikely that the person you interact with ever talks to, or even knows, the final decision makers. With a local bank, your lending representative might not be the final decision maker either, but they are certainly much closer to the top of the decision pyramid.
Because community banks are smaller than large chains, the lending process tends to be more inclusive, and your lending representative will have plenty of opportunities to bend the ear of the final decision makers to support your loan.
Lending managers at larger banks base much of their decisions and processes on the directives that get passed down from the top. This formulaic approach to issuing commercial mortgage loans give them less of an insight into what is actually happening in their back yards. They also tend to move from branch to branch far more often, and aren’t as plugged in to the local market the way that community banks in Maryland are.
A lending manager at a local community bank, on the other hand, will usually be much more plugged in to the real estate market in your area. With the experience that comes with doing mainly small business commercial mortgages, your community bank lending manager will be able to advise you on what similar deals have passed through their office have closed for, what kind of prices other buildings are going for, and whether now is really a good time to buy or not.
These kinds of insights are only possible when lending managers spend the majority of their time talking to small business owners and focusing on small business commercial mortgages.
Large banks rely on high churn to constantly keep profits high. That is, they are far more interested in doing a large number of deals with a large number of customers than they are in helping their customers get larger and larger deals. Community banks often don’t have the luxury of a customer pool numbering in the millions. Instead, the focus of your lending manager is customer retention and growth.
Rather than seeing you as just another number in the line of mortgages they will issue, your business is central to the bank’s financial success, and your growth is essential to future success. To that end, your lending representative is more likely to go out of their way to help you succeed, in the hopes that when it comes time for you to expand to a larger building or a new location, you will come back to give them your business. The better they can make your financial situation, the sooner you can be their customer again.