Should you borrow from a bank or credit union?

Many borrowers wonder whether they should borrow from banks and credit unions, and there are things to consider.

Although bank debt is often considered the debt of last-choice to some of the more institutionalized or experienced borrowers (because of shorter terms, amortizations and recourse provisions) they are still the go-to for other shops (both big and small alike) for lots of reasons.

Bank and Credit Union Small Business and Commercial Real Estate Loans
Bank and Credit Union Small Business and Commercial Real Estate Loans

The reality is that they quite often offer the lowest cost-of-closing and (with some level of recourse for loans under $10–$20MM) sometimes the lowest rates (relative to leverage).

They also have a very important feature that lenders who scrutinize their debt don’t have — the ability to reduce or even eliminate prepayment penalties. Bank and Credit Union debt can be wonderful for transitional and bridge opportunities as well.

The reality though is that there are thousands of banks and credit unions making commercial mortgages, so how do you choose the right one?

You have to have the right commercial mortgage brokerage with the right relationships.

At Janover Ventures, they have relationships with banks and credit unions across the country, which is a big advantage from what most lenders have – only local relationships.

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