Do I need a Commercial Mortgage Broker?

In the simplest terms you may ask yourself these questions as well; Do I need a Car?, Do I need that new iPhone?, Do I need to call a plumber for that small leak?... The answer to any of these questions is NO. You don’t need these things or services, but for the price you pay, the benefits can be more that worth it.

People who use Mortgage Brokers typically understand that they are paying for a service by a professional who understands what options, programs and terms are available in the market. Doing it themselves is not an option, usually because

What is a DIP facility or DIP Financing?

There are times when businesses and properties go into bankruptcy or foreclosure for a variety of reasons.  When this happens, the court will typically appoint a Receiver who manages the file and handles the operation of the property or business until the situation is resolved.  The Receiver has court appointed authority to do what is necessary to get to a resolution.  In respects to a foreclosure on a property, a Receiver may determine that additional funds are required to preserve or bring the condition of a property to an acceptable and marketable level and is charged with the task of obtaining this financing.

So where does the money come from if the property is already in foreclosure?

Even if your bank doesn't need it, Environmental reports are just important as the inspection.

Legal costs, Appraisals, Property Inspection Reports; Many commercial borrowers know the standard requirements and costs associated with purchasing or owning commercial real estate.  When I ask if a Phase 1 Environmental Report has been completed, I'll typically get that wonderful 'deer in headlights' look.  Especially after I tell them it'll cost about $3,000.  Trust me when I say this is a small price to pay to be sure the site is clean.

So why do I recommend people spend more money on more reports?  CYA... (Cover Your "Rear"), here's why.

US has just been downgraded. How does your business look?

On the news that the US Credit rating downgrade, many people and businesses are wondering how their business and credit worthiness looks like. Without hiring a Controller or CMA to look into the details and help you understand what your business financials should be telling you, there are limited options. Many small to medium sized businesses don’t know what their Debt Equity Ratio, Current Ratios, Quick Ratios or any other information which may be extremely helpful to a business. Most business owners are focused on Margin. If I can make a high enough margin on my product, I will make money. The reality is, this is not true.

Myth #5 - Bank of Canada didn't raise rates, I have time to lock in later.

Bank of Canada made a statement that they would not be raising rates and keeping the overnight rate at 1% on July 20th. Bank Prime rate is typically 2% higher than this and is currently at 3%. Those that are in variable rate mortgages or have floating rate loans or lines of credit should look closely at their finances. Even though rates didn't go up on July 20th, there is suggestion that rates will start to increase in the near future.

Due to this information, long term fixed rates start to reflect impending rate increases. Just in the last few days, the long term rates have increased by 0.1% and may continue to increase. As more information is released that supports the reasons The Bank of Canada would increase the overnight rate, the higher fixed rates will go. The fixed rate will settle when they get to a comparable rate to what the expected increase will be.

What this means is if you are waiting to lock in rates just before you start hearing that the bank will be increasing the overnight rate, you're already too late in getting the best possible rates. If you have concerns about your cash flow and how your variable rate may be affected, you should contact me to discuss the details and determine what options are available.