When you’re trying to get funded for a commercial real estate venture, you should keep in mind that whether you believe this or not, most lenders actually want to loan you the money you need, to see the project through. It’s good for you and it’s good for them to have the business.

But long experience has taught lenders which applications are not good bets for funding and which are. Very often, an experienced lender can look at your paperwork and have a pretty good idea about approval or disapproval in just a few minutes, because the strong points and the weak points are generally very obvious.

Here are some of the most common reasons why your commercial real estate loan application would be rejected:

• Unnecessary documentation – most of the time, the documentation will be reviewed by a lender who knows exactly what to look for, and if it isn’t there, your application will be flagged. But if you bury the useful papers with all kinds of unnecessary documentation, it’s even more likely that your case is headed for the circular file
• missing key information – since instructions are always provided with a loan application, there’s no excuse for you leaving out vital information required by a lender – if you do, that’s pretty much an automatic disqualification.
• Brokers who shield clients – lenders don’t like acting through intermediaries like brokers, especially brokers who profess to be protecting a client.
• Applying with multiple lenders – when you put the same application package in with several companies, it might well happen that your loan package gets reviewed by managers who compare notes – and each of them gets annoyed about the group effort.
• Unrealistic requests – the best approach to applying for a loan is to simply submit your application and let the process work through. If you submit special requests along with your application, e.g. for longer payment periods or any other variation on terms, it’s very possible that your whole application will be scuttled.
• Refusal to pay upfront fees – borrowers who have been burned in the past by upfront fees before closing sometimes try to manipulate a loan application to avoid those fees. That’s not going to happen – past history has nothing to do with the current transaction.