5 Questions to Ask Before Choosing a Commercial Lender

Not all lenders are the same. The rate matters, but it's not the only thing that matters, and it might not even be the most important thing for your deal.

Before you commit to a lender, here are five questions worth asking. The answers will tell you a lot about whether this is the right partner for your transaction.

1. "Can you realistically close by my deadline?"

This seems like an obvious question, but a lot of borrowers don't ask it directly, and a lot of lenders give optimistic answers without really committing.

Ask for specifics. What does their typical timeline look like? What are the main factors that could slow things down? Have they closed deals on similar timelines before?

A lender who says "we can probably do that" is different from one who says "yes, we've done this timeline before, here's how we'll make it work."

If your deadline matters, and it usually does, you need a lender who can commit to it, not one who's hoping for the best.

2. "What could cause this deal not to close?"

This question cuts through the sales pitch. A good lender will be honest about potential issues.

Maybe the appraisal needs to come in at a certain value. Maybe there's something about the property type that could be tricky. Maybe your financial situation has a wrinkle that needs to be addressed.

You want a lender who identifies potential problems upfront, not one who glosses over them and surprises you later. If they can't think of anything that could go wrong, they either haven't looked at your deal carefully or they're not being straight with you.

3. "What are all the fees and costs I should expect?"

The interest rate gets all the attention, but fees can add up quickly. Make sure you understand the full picture.

Ask about: origination fees, processing fees, underwriting fees, application fees, appraisal costs, legal fees, title costs, and any other charges. Some lenders quote low rates but make it up in fees. Others are more transparent.

Also ask about prepayment penalties. If you plan to refinance or sell before the loan term ends, prepayment terms matter a lot.

A good lender will give you a clear, written breakdown of all costs before you commit. If they can't or won't, that's a red flag.

4. "Who will I be working with, and how will we communicate?"

This question matters more than most people realize. You're going to be in a relationship with these people for months, possibly longer if you do more deals together.

Will you have a single point of contact who knows your deal? Or will you be passed between multiple departments? How do they prefer to communicate, phone, email, text? How quickly do they typically respond?

The answers tell you a lot. A lender who says "you'll work directly with me throughout the process" is different from one who says "our team will handle your file."

If communication has been a frustration with past lenders, pay attention to how responsive they're during the application process. If they're slow to respond now, it won't get better after you're committed.

5. "Have you funded deals like this before?"

Experience matters. A lender who has done dozens of deals like yours will know what to expect and how to handle issues that come up. A lender who's doing something for the first time is more likely to hit unexpected problems.

Ask specifically about your property type, your loan size, and your market. If you're financing a church in Utah, you want someone who's done church financing before, not someone who specializes in multifamily in Texas.

Don't be afraid to ask for references. A lender with a track record should be happy to connect you with borrowers who've worked with them before.

The Bigger Picture

The right lender isn't just the one with the lowest rate. It's the one who can actually close your deal, on your timeline, without surprises.

A slightly higher rate from a lender who communicates well, moves quickly, and delivers what they promise is usually worth more than a lower rate from a lender who leaves you wondering whether the deal will close.

Trust your instincts. If something feels off during the application process, slow communication, vague answers, changing terms, it probably won't get better. Better to find out now than after you've invested weeks in a process that isn't going to work.

Have questions about a deal you're working on? We're happy to give you straight answers. Call 801-706-2802 or email info@bluridgefunding.com.

About the author

Alan Blood

Alan is Managing Partner at BluRidge Funding and has worked in mortgage and real estate finance since 1996, with commercial lending as a principal focus since 2003. He holds an economics degree from BYU and a law degree from the University of Utah, and is a founding board member and former President of the Utah Association of Mortgage Brokers. More about the team.