Commercial Mortgage Declined? Here’s What to Do Next

If a bank has declined your commercial mortgage, the file isn’t dead. One lender’s “no” only tells you that this deal didn’t fit that lender’s rules on that day. It doesn’t tell you what the rest of the market will say. The usual next step is to reposition the deal and put it in front of a lender whose appetite actually fits.

Why was my commercial mortgage declined?

Most declines come down to a mismatch, not a bad deal. Common reasons include:

• Debt service coverage is too thin on the numbers as they were presented.
• The financials are hard to read: out of date, inconsistent, or missing the story behind a bad year.
• The property type or location is outside that lender’s appetite, even if the deal is sound.
• The structure doesn’t suit the lender: the loan size, the term, the position, or how the borrower holds title.

Banks follow strict internal rules, and federally regulated ones also work within guidance from regulators such as OSFI. A deal that falls just outside those rules gets a quick no, even though another lender may price and approve it without trouble.

Can the same deal be approved by a different lender?

Often, yes, but rarely by sending the identical package somewhere else. A file is usually repositioned first. That can mean:

• Rebuilding the presentation so the income, the property and the borrower’s track record are easy to follow.
• Changing the structure, such as the loan amount, the term or the security offered.
• Choosing the type of lender that suits the deal, whether that’s a credit union, an alternative lender or a private lender.

Here is a typical example. A borrower is declined because a bank doesn’t like the property type. The same property goes to a lender that specializes in it, with the figures laid out clearly, and the answer changes. Nothing about the property changed. What changed was who was reading the file.

What does Craigburn Capital do differently?

You don’t have to approach lender after lender yourself. I take one application, do the comparison for you, and work with my commercial lending partner and a wide network of lenders to find the one that fits before anything is submitted. That also avoids more declines on your record from lenders who were never going to be the right match.

What should I bring to the conversation?

• The decline letter or the reason you were given, if you have it.
• Recent financial statements and tax filings for the borrower and the property.
• Details of the property and what you are trying to do: purchase, refinance, or pull out equity.

Frequently asked questions

Does a bank decline hurt my chances with other lenders?

Not by itself. Lenders look at the deal in front of them. What matters is presenting the file properly and not sending it to lenders that don’t fit.

Should I apply to several lenders myself after being declined?

It’s usually better to find the right fit first. I do the comparison for you, so the file goes to lenders that are likely to say yes.

How long does it take to find another lender?

It depends on the file and how complete your documents are. Clean, recent financials and a clear explanation of the deal speed things up the most.

What if my deal doesn’t suit any bank?

There are other types of lenders, including credit unions, alternative lenders and private lenders. They price differently, but they can make a deal work that a bank can’t.

Been declined and not sure what comes next? I would be glad to take a look at the file and tell you honestly whether and where it can be placed.

I look forward to hearing from you in regard to your mortgage needs.
902-465-5533. I answer.
Patrick

p.s. Ready to start? Apply here: https://craigburn-capital.mtg-app.com
p.s. Prefer to talk it through first? Book a time with me here: Schedule a call
p.s. FSRA Principal Broker License #M23006699, Craigburn Capital. NS Brokerage 2026-3000179, NS Broker 2026-3000180.
p.s. Get the Craigburn mortgage app: https://craigburn-capital.mtg-app.com

Patrick Sawler is a mortgage broker and owner of Craigburn Capital, licensed in Nova Scotia and Ontario, with private financing available in New Brunswick and PEI. He answers his phone. Service aussi disponible en français.

Call 902-465-5533 or start your application today.