3 Tips for Prospecting
Reach out to lenders, other professionals and past contacts to build your commercial business
Andrew Bogdanoff, president, Remington Financial Group
As published in Scotsman Guide's Commercial Edition, April 2008
As brokers enter the commercial mortgage market - whether crossing over from the residential market or just starting out - one thing is true: Prospecting for leads is a top priority.
Finding commercial leads is not as hard as it might seem, but it does require diligence, an ability to foster relationships and an understanding that not every lead is good. Savvy brokers know that time equals money and is best spent targeting businesses that seek funding. The most obvious way for brokers to find leads is to foster relationships with people who lend money or who are familiar with businesses that need funding.
1. Make friends with banks and investors: They lend money to companies and also turn down businesses asking for loans. The reasons vary. Borrowers may not have adequate credit history, or they may seek a loan that doesn't meet the bank's or investor's criteria. Regardless, these turndowns are a target-rich environment.
Don't be afraid to book an appointment with lenders and talk to them about what happens to the loan applicants they turn down. Tell them about your business and ask them to refer their turndowns to you. By referring a customer to a secondary lending source like you, they can build goodwill with their customers.
Occasionally, bankers or lenders might have a policy about not referring business leads. But if lenders already have a resource to whom they refer leads, don't walk away too quickly. Ask if they are happy with the current scenario. If not, it's a prime opportunity for them to look for another solution. If they are happy, ask them to give you a shot anyway. Suggest they give you one lead and continue to pass the others to their regular sources. If you are successful on the deal they give you, and they become unhappy with their regular sources, they'll know you are reliable.
2. Get to know other professionals: Many professionals outside the mortgage industry know businesses that need funds. Accountants, attorneys, business brokers and insurance companies often have access to people with whom you want to work. Often, these people have high-level contacts in the companies they represent. This can help you move quickly and efficiently. Once you have identified these contacts, let them know that you finance businesses and real estate. Explain the types of deals on which you have worked and how you have helped your clients secure funding successfully. Ask them if they have any clients who may need commercial lending.
3. Embrace a "first name" strategy: Create a list of all the people you could call today who would recognize you only by your first name and the sound of your voice. Then reach out to them. Whether you use the phone, e-mail or another communication method, start a disciplined practice to reach out to a specific number of these contacts every week. This approach tends to provide solid returns because the people with whom you are communicating know you and are apt to send leads your way.
This is especially timely and appropriate if you're new to the market. For instance, if you have recently gone from residential to commercial lending, you'll want to let your contacts know. Ask them to keep an ear to the ground for you and to send any business they hear of your way. Continue this practice weekly until you have exhausted your list. You then can start again by sending updates you want your contacts to know about - from how your business has grown to an interesting deal you helped fund.
Prospecting is important for building your business. Although these approaches are common sense, many brokers do not practice them. As such, there is significant referral business not being solicited. Jump in and make some relationships that can help your business for years to come.
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