Industrial Mortgages and Commercial Mortgage Finance in Ontario

Commercial Mortgage Finance in Ontario includes several property categories and is a specialized field of financing. Each type of commercial financing involves not only different types of financing but also different types of properties and verification methods.

Commercial Mortgages can be complex so it is risky business for an individual to go directly to a lender for one of these mortgages because there is so much involved over the course of the closing that the chances of not satisfying all of the lenders conditions are high. Even Mortgage Agents and Brokers turn to Mortgage Brokers who are specialists in commercial mortgage finance in Ontario to ensure a solid approval and smooth closing for their clients.

The property and mortgage financing types that fall under the commercial finance umbrella are:

·         Apartment Financing

·         Health Care Facilities Financing

·         Industrial Mortgage Financing

·         Warehouse Financing 

·         Retail Structures Financing 

·         Office Complex Financing and more.

Each property type will require different financing, with different requirements and conditions.

Where industrial mortgages and commercial mortgage finance in Ontario is concerned and because of the nature of the use of the property, industrial mortgages tend to be harder to locate and secure than typical commercial mortgages – for the average Mortgage Broker or Agent.

Industrial mortgages are usually arranged on Industrial Malls, Industrial Condominiums, Warehouse Buildings, Plants and Industrial Parks.

The challenges as they relate to obtaining an industrial mortgage are because industrial mortgages financing calls attention to the nature of the property usage, zoning, environmental impact, and location.

Generally when attempting to obtain an industrial mortgage in Ontario you will need:

1.       Property location and specifications

2.       Building appraisal and property survey

3.       Relevant industrial experience

4.       Credit history

5.       For an existing business, the previous two years of accounts

6.       For a new business, a comprehensive business plan detailing income projections

7.       Environmental reports

8.       Legal clearances

9.       Proof of tenants or tenant leases

If you cannot satisfy one or more of the above noted requirements and you have a good Commercial Mortgage Broker you should be fine. Mortgage Brokers who specialize in industrial mortgages and commercial mortgage finance in Ontario generally have access to AAA lenders as well as private lenders who can be called upon in a situation where issues arise.

The key is to be prepared if you plan to seek out an industrial mortgage. Here are some steps you can take to ensure that you are successful:

1.       Establish a relationship with an experienced Commercial Mortgage Broker (even if you are a general Mortgage Agent or Broker) – they will be able to apprise you of what will be needed to get your deal done and will ensure a smooth mortgage closing.

2.       Make sure you have your ducks in a row. The more conditions that you satisfy in terms of what an AAA lender will be looking for, the higher the likelihood that you will get the most competitive deal.

3.       Don’t look at a property that’s more trouble than it's worth. Now that you know that an industrial mortgage will be impacted by its location, usage, zoning and will require an environmental impact report – keep those issues in mind when looking at industrial property locations.

For more information about industrial mortgages and commercial mortgage finance in Ontario please contact David Mandel at First Equity by calling (416) 440-1224 ext 22 or visit www.firstequity.ca.