Case Study: Moving Your Commercial Real Estate Mortgage

Client:  The Client is a profitable Chicagoland manufacturing company in operation since 1995. They continue to experience increasing revenues as well as profitability. The Client purchased their current building in 2006 of which they occupy 55% and rent out the remaining space to separate tenants.

Problem: After their long-time banker left their current financial institution, the Client felt it was the right time to move their commercial mortgage relationship. The company was profitable and felt they could benefit from the widely advertised lower rates across the banking industry. Neither partner, of the two person ownership arrangement, had the time, interest, or industry knowledge to seek a new bank, secure a beneficial rate, and establish a relationship with a trusted banker.

Solution: Coveted Financial was hired to seek out a bank that would not only provide a favorable interest rate, but also a program that would allow the Client to amortize the $900,000 loan on a 10-year fixed rate schedule. In doing so, their loan would be paid off in full upon maturity.

During the first month, Coveted Financial met with the Client to gather information. At this time, Coveted had already started to vet banks they knew would offer the loan schedule and amortization the Client desired. Coveted spent time and effort gathering and analyzing information. This information was then used to produce a bank placement memo which included: the requested credit structure, background on the company and borrowers, full financial and credit analysis of the business and debt service coverage analysis based on proposed structure. The deal also included moving their banking accounts and establishing a $100,000 line of credit to ensure this was a new well rounded relationship. This was a strong client and a strong deal. Further, the Clients were organized and very responsive in getting the information to Coveted Financial in a timely manner. Thus, this entire part of the process was completed rather quickly in less than six weeks.

Once the memo was completed, Coveted Financial then sent the memo to previously selected banks. At the Client’s request, the memo was also sent to their current bank as a courtesy and to see if they had an appetite in retaining the business. Due to Coveted’s history within the banking industry and the strength of the deal, the bankers knew they would have to present their best and most competitive offer in order to win the business.

In month two, Coveted hosted a bank tour day for their Client. Each banker individually met with the Client and toured the facility. During this time the five suitable banks introduced themselves and explained why they would be the best to obtain the Client’s relationship. The beauty of this platform is that the Client need only give up one day to meet with the bankers. Every other aspect of what can be an exhausting and frustrating process was handled by Coveted including but not limited to disseminating all of the financial information, vetting the right bankers, structuring the deal and answering all of the bankers’ questions. The Client was pleased with all five bankers, which in a positive manner, made the decision difficult. All were good viable choices. The bankers then were asked to provide Coveted with a proposal. Coveted Financial then presented these proposals to the client as a side-by-side comparison. They provided the client with input over and above looking at just the rate. The client then made an informed decision. The client has been thrilled with their new bank and banking relationship over the course of the past five years.

To move your commercial mortgage, contact Coveted today.


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