How To Know If A Commercial Lender Is Legit

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Commercial lenders play an important role in the business community. It doesn’t really matter how good the business model is or what the size of the business is, at some point, an external helping hand is required.

However, it is really important to be careful when dealing with commercial lenders, particularly hard money lenders. There are lots of scammers who are looking to profit from individuals and businesses in their time of need.

Here are some ways you must ensure that the commercial lender is legit, before engaging in any business:

Website

All commercial lenders have legitimate websites and have registered domain names. Before engaging with any commercial lender, you should go on their website and learn as much as you can about the commercial lender.

Learn about the past projects and the type of loans provided by the lender.

Referrals

Personal referrals are one of the best ways to know whether a commercial lender is legit.

Many commercial lenders operate by building contacts within the community of investors. This is why referrals through your personal or professional contacts is the best way to know if the lender is not a fraud.

Loan Agreement

If there is any paperwork involved, it is always a good idea to take the documents to a lawyer for review. A legal professional may be able to detect any loopholes in the contract, which you otherwise may miss.

Exit Strategy

Commercial lenders take keen interest in the exit strategy of the borrower. This is because they want to know how they will be getting their money back.

If the commercial lender you are dealing with has asked you for your exit strategy and discussed how your exit strategy can be improved, then it is a definite sign that the lender is real.

Types of loans

Commercial lenders are businessmen and usually give out loans for investing in business or real estate.

If a commercial lender offers a car loan or a student loan, it could be an indication of a scam. Ask your commercial lenders what type of loans they provide and why they are interested in the particular areas.

Equity

Commercial lenders are unlikely to provide 100% financing for any project or property. This is because they want to see how confident is the investor in his/her own project, and the confidence is generally reflected in the amount of equity that is involved.

A commercial lender offering 100% financing is likely a scam.

We are one of the most trusted commercial lenders in NY and provide hard money loans, bridge loans as well as mezzanine debt. Contact us today on 1-800-514-7350 or visit our website for more information.

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