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Commercial mortgage underwriting is usually discussed in terms of asset performance, such as rents, occupancy, expenses, valuations and debt loads. But we can’t forget that traditional lenders, especially banks, also are evaluating the borrower. These borrowers are usually a business or corporation, and gauging the risk of a particular business can be complicated.

Banks use a number of accounting metrics to gauge a borrower’s credit-worthiness and these are worth learning. Unfortunately, it also is true that some banks automatically disqualify certain business types for no rational reasons. Commercial mortgage brokers should take time to understand how underwriting standards develop and evolve, as well as some of the finer points of the process.