Your bank said no. That is not the end of it.
A decline on a commercial property tells you about that lender. It does not tell you whether the deal is fundable. The useful next step is to find out which of those two you are dealing with.
The short answer
A commercial decline is usually a policy fit problem inside one credit box rather than a judgement about you, and there are four routes out of it.
- A different conventional lender. Same rate territory, same structure, different policy, and the cheapest fix when the decline was appetite rather than arithmetic.
- A credit union. Frequently more flexible on commercial property, particularly on smaller loan sizes, with pricing usually close to bank pricing and terms that can be shorter.
- An alternative or private lender. Available quickly and priced accordingly with lender fees on top, sensible where there is a defined exit rather than as a permanent home for the debt.
- Restructure the ask. Less leverage, a longer amortization, a covenant added, or the property split from the operating business.
What just happened
You banked there for years. The account manager was encouraging. Then the answer came back as a short email with no real explanation, and now you are holding a purchase deadline or a maturity date and no financing.
The frustrating part is the silence around it. Most borrowers are never told the real reason, so they assume the problem is them, their credit, or their business. Usually it is none of those things.
Why this happens
Your branch did not decide this. On commercial files the adjudication happens in a credit department far from the person you know, and that department is applying a written policy to a category, not judging you. The relationship carries less weight than most borrowers expect.
The common reasons are policy fit rather than character. The asset class sits outside their current appetite. The loan is below their minimum size, which is a real constraint because a small commercial file costs a large lender almost as much to underwrite as a big one. The debt service falls short once they apply their stress rate rather than the contract rate. Or they exited that property type last year and nobody told the branch.
Each of those is a statement about one credit box. Another lender has a different box.
What your options actually are
A different conventional lender. The cheapest fix when the decline was appetite rather than arithmetic. Same rate territory, same structure, different policy. This is the first thing we test.
A credit union. Credit unions are frequently more flexible than banks on commercial property, particularly on smaller loan sizes and on borrowers whose income takes explaining. Pricing is usually close to bank pricing. Terms can be shorter.
An alternative or private lender. Available quickly and priced accordingly, with lender fees on top of the rate. Sensible when there is a defined exit, such as a lease that completes or a renovation that stabilises the income. Expensive and risky as a permanent home for the debt. Our private and second mortgage page sets out how that pricing works.
Restructure the ask. Often the quietest and best answer. Less leverage, a longer amortization, a covenant added, or the property split from the operating business. The same deal at a different shape can clear a box it failed at first pass.
When the decline was right
Sometimes it was. If the property does not produce enough income to cover the payment at a realistic rate, no lender fixes that, and shopping the file around only produces a slower version of the same answer while your deposit clock runs.
We will say so. It is a better outcome to hear that the deal needs more equity, a signed tenant or another year of operating history than to be handed expensive money that makes a weak file worse. Waiting is a legitimate strategy and occasionally the only good one.
What we would need to look at it
Three things get us to a real answer quickly rather than a polite one. The decline letter or email if you received anything in writing. The rent roll, or the operating statements if you occupy the building yourself. And the property address, which tells us more about lender appetite than most people expect.
From that we can size what the income supports and tell you which lenders fund that asset in British Columbia. You can also run the numbers yourself first with the commercial mortgage calculator.
After a decline.
Related situations
Send us the file and we will read it straight.
Rent roll or operating statements, the property address, and the decline letter if you have one. We will tell you where it can go, or that it cannot go anywhere yet.