Commercial mortgages are generally the next step for business lending. There are a variety of bank and nonbank products in the market from time to time for businesses to access small sums of capital. These small amounts are often unsecured,  but for larger amounts commercial lenders require security.

It is simple risk management and the highly regulated banking industry has strict guidelines of how far they may extend themselves, and at what points they must require security in order to reduce the risk to themselves. Commercial property as security for commercial mortgages comes at a cost. The legal and administrative costs of taking security over commercial property for a commercial mortgage can be uneconomical under certain thresholds. For this reason many commercial lenders will place minimum limits on the amount they will lend as a commercial mortgage.

Many lenders in the commercial mortgages space will limit their exposure to between $1 million and $3 million. In this space there are the major banks, and many non-bank commercial mortgage lenders. The space between $3 million and $7 million is a little more exclusive as fewer commercial mortgage lenders have an appetite for the increased level of risk. Chifley Securities is one of less than a handful of commercial mortgage lenders who are specialised in the $7 million and up space. This is an area where few commercial mortgage lenders are willing to enter. They may not have an appetite for the level of risk involved and/or they may not be able to cover the total amount of the commercial mortgage on their own, and without syndication. Chifley Securities has a fund of $480 million and growing and funds these larger commercial mortgages alone.

About the Author: Dominic Lambrinos

Dominic Lambrinos is a financial expert who provides professional business finance solutions, commercial financial engineering, expert review of financial submissions, negotiation, equity raising, business sales, and trade financing. Dominic is also a sought after finance business trainer, and accomplished public speaker.

Under Dominic’s guidance , his team can also prepare professional financial submissions, review financial statements, provide financial accounting, business administration, development of information systems, marketing and sales skills, computer and Internet sales skills.