Picking the Right Mortgage Broker

About half the deals that I do are with mortgage broker that I recommend. The other half is a toss-up. Meaning I never know who I am going to get to work with. Yes, work with. A lot of buyers think that they will be the only ones working with their lenders, however as a real estate broker, I put in a lot of time with them as well. It’s my job to make sure that they have all the documents necessary for the sale, as well to make sure that our mortgage approval deadline is met.The deadline that was created in the offer is of utmost importance to everyone involved. Sellers are already nervous, so to ask for an extension could potentially kill the deal. They are not obliged to extend. It’s up to me, if I am in that situation, to convince the sellers and their real estate broker that we are still on track to get the mortgage approval, even though we haven’t gotten it yet.


One of my jobs is to stay in collaboration with the listing broker. If I keep them in the loop every step of the way, they will be understanding of what is happening if I have to ask for an extension. Normally it’s in the best interest of the seller to continue with the offer rather than drop it for the next one. However if you got the accepted deal while in a multiple offer circumstance, the situation isn’t stable. The seller doesn’t want to lose time dealing with you when they might have another buyer who has been bugging them for a chance.Time delays in an offerWhen I receive an offer or create one for my buyers, we normally see 10-14 calendar days for financing for a residential property. Over the years, I have been finding that banks are taking much longer to approve the financing. They have stricter criteria and more red tape, which creates more delays. Many buyers may not have their files complete with their mortgage broker as well, which also creates time delays.”I’ve experienced hundreds of interactions with mortgage brokers, and there have been instances that could have easily been avoided with the right questions from the start. On one deal I did, the mortgage broker was from Calgary. He didn’t know our laws, the time difference was an issue and he didn’t speak French. It was horrible for me and my clients.”Questions to ask yourself about your mortgage broker- Do they live in Montreal (know the Quebec laws and speaks French)?
- Will they be available or will they be on vacation or away?
- Will they take care of your case 100%, and not pass it on to an assistant or let the bank deal with it all? (Meaning will they represent you fully and take care of you completely)
- Are they available on weekends for emergencies?
- Do they work for one bank and their products, or are they independent and work with all banks?
- Which banks do they have personal relationships with. This helps to have pull if they need to ask a favour for a rush job.
- For expenses, make sure from the start that the bank evaluation is paid for by someone else besides yourself, preferably the bank. Some mortgage brokers have special deals with notaries or movers, helping you save money.


These questions are to help you chose the best person to work on your team. Yes team. When buying, your team consists of your mortgage broker, your real estate broker, a notary, insurance broker and your building inspector. For all of these professionals, you will either be using a recommended person or doing research to find the best deal. Deal = price + service.

Alternative Financing for Wholesale Produce Distributors

Equipment Financing/Leasing

One avenue is equipment financing/leasing. Equipment lessors help small and medium size businesses obtain equipment financing and equipment leasing when it is not available to them through their local community bank.

The goal for a distributor of wholesale produce is to find a leasing company that can help with all of their financing needs. Some financiers look at companies with good credit while some look at companies with bad credit. Some financiers look strictly at companies with very high revenue (10 million or more). Other financiers focus on small ticket transaction with equipment costs below $100,000.

Financiers can finance equipment costing as low as 1000.00 and up to 1 million. Businesses should look for competitive lease rates and shop for equipment lines of credit, sale-leasebacks & credit application programs. Take the opportunity to get a lease quote the next time you’re in the market.

Merchant Cash Advance

It is not very typical of wholesale distributors of produce to accept debit or credit from their merchants even though it is an option. However, their merchants need money to buy the produce. Merchants can do merchant cash advances to buy your produce, which will increase your sales.

Factoring/Accounts Receivable Financing & Purchase Order Financing

One thing is certain when it comes to factoring or purchase order financing for wholesale distributors of produce: The simpler the transaction is the better because PACA comes into play. Each individual deal is looked at on a case-by-case basis.

Is PACA a Problem? Answer: The process has to be unraveled to the grower.

Factors and P.O. financers do not lend on inventory. Let’s assume that a distributor of produce is selling to a couple local supermarkets. The accounts receivable usually turns very quickly because produce is a perishable item. However, it depends on where the produce distributor is actually sourcing. If the sourcing is done with a larger distributor there probably won’t be an issue for accounts receivable financing and/or purchase order financing. However, if the sourcing is done through the growers directly, the financing has to be done more carefully.

An even better scenario is when a value-add is involved. Example: Somebody is buying green, red and yellow bell peppers from a variety of growers. They’re packaging these items up and then selling them as packaged items. Sometimes that value added process of packaging it, bulking it and then selling it will be enough for the factor or P.O. financer to look at favorably. The distributor has provided enough value-add or altered the product enough where PACA does not necessarily apply.

Another example might be a distributor of produce taking the product and cutting it up and then packaging it and then distributing it. There could be potential here because the distributor could be selling the product to large supermarket chains – so in other words the debtors could very well be very good. How they source the product will have an impact and what they do with the product after they source it will have an impact. This is the part that the factor or P.O. financer will never know until they look at the deal and this is why individual cases are touch and go.

What can be done under a purchase order program?

P.O. financers like to finance finished goods being dropped shipped to an end customer. They are better at providing financing when there is a single customer and a single supplier.

Let’s say a produce distributor has a bunch of orders and sometimes there are problems financing the product. The P.O. Financer will want someone who has a big order (at least $50,000.00 or more) from a major supermarket. The P.O. financer will want to hear something like this from the produce distributor: ” I buy all the product I need from one grower all at once that I can have hauled over to the supermarket and I don’t ever touch the product. I am not going to take it into my warehouse and I am not going to do anything to it like wash it or package it. The only thing I do is to obtain the order from the supermarket and I place the order with my grower and my grower drop ships it over to the supermarket. “

This is the ideal scenario for a P.O. financer. There is one supplier and one buyer and the distributor never touches the inventory. It is an automatic deal killer (for P.O. financing and not factoring) when the distributor touches the inventory. The P.O. financer will have paid the grower for the goods so the P.O. financer knows for sure the grower got paid and then the invoice is created. When this happens the P.O. financer might do the factoring as well or there might be another lender in place (either another factor or an asset-based lender). P.O. financing always comes with an exit strategy and it is always another lender or the company that did the P.O. financing who can then come in and factor the receivables.

The exit strategy is simple: When the goods are delivered the invoice is created and then someone has to pay back the purchase order facility. It is a little easier when the same company does the P.O. financing and the factoring because an inter-creditor agreement does not have to be made.

Sometimes P.O. financing can’t be done but factoring can be.

Let’s say the distributor buys from different growers and is carrying a bunch of different products. The distributor is going to warehouse it and deliver it based on the need for their clients. This would be ineligible for P.O. financing but not for factoring (P.O. Finance companies never want to finance goods that are going to be placed into their warehouse to build up inventory). The factor will consider that the distributor is buying the goods from different growers. Factors know that if growers don’t get paid it is like a mechanics lien for a contractor. A lien can be put on the receivable all the way up to the end buyer so anyone caught in the middle does not have any rights or claims.

The idea is to make sure that the suppliers are being paid because PACA was created to protect the farmers/growers in the United States. Further, if the supplier is not the end grower then the financer will not have any way to know if the end grower gets paid.

Example: A fresh fruit distributor is buying a big inventory. Some of the inventory is converted into fruit cups/cocktails. They’re cutting up and packaging the fruit as fruit juice and family packs and selling the product to a large supermarket. In other words they have almost altered the product completely. Factoring can be considered for this type of scenario. The product has been altered but it is still fresh fruit and the distributor has provided a value-add.

The idea for factoring/P.O. Financing is to get into the nuts and bolts of every single deal to ascertain if it is doable.