How Community Banks Can Stay Competitive & Win More Commercial Real Estate Deals

Industry insiders are predicting that commercial lending will be a highly competitive industry in the coming years. Community banks have an opportunity to stay ahead of the competition by investing now in their technology, people, and processes. This blog post explores how to win more deals with these four key initiatives:

1. Understanding the competition
2. Becoming a commercial real estate specialist
3. Leveraging community involvement and knowledge
4. Using technology as an advantage

Understanding The Competition

Before the competition to community banks can be addressed, it needs to be understood.

When it comes to commercial real estate lending, the biggest source of competition for community banks is other community banks. According to the CSBS 2021 National Survey of Community Banks, 59.2% of respondents cited other community banks with a presence in the same market as the primary source of competition for commercial real estate loans. Regional and national banks with a presence in the same market came in at roughly half of that number at 27.4%.

This is a significant finding that highlights where community banks should be focusing their attention. Unlike the residential mortgage world, where a minority of respondents cited other community banks as their main competition (34.4%), for commercial loans, it’s the banks down the street or across town that need to be differentiated from.

Luckily, this is good news for community banks wanting to become more competitive. Instead of focusing their attention on trying to outcompete the national, billion-dollar banks, they can instead focus on how to win more business than their local peers.

Becoming A Commercial Real Estate Specialist

In order for community banks to win more commercial real estate deals, they need to differentiate themselves from the banks they are competing with. The best way to do this is by becoming a commercial real estate specialist.

When it comes to residential lending, there’s really only two types of scenarios a bank will run across: lending to a homeowner or lending to an investor. The terms of those loans may vary slightly, but the same basic rules apply for both.

In commercial real estate, there are a wide variety of potential scenarios that a lender might encounter and will need to know how to handle. From a multi-tenant office investment to an unsubordinated ground lease, lending on commercial real estate deals can be significantly more complicated than a typical residential loan.

While the complication of commercial lending can be a roadblock for some banks, for others, it can be a chance to differentiate themselves from their competition. If a community bank chooses to spend the time and resources to become educated on commercial lending, hires or trains a dedicated commercial lender, and focuses its marketing on winning commercial business, it can establish itself as the go-to commercial real estate expert in the area.

Leveraging Community Involvement and Knowledge

Although other community banks are the biggest source of competition when it comes to commercial real estate lending, that doesn’t mean the national banks can be ignored. If a community bank wants to win more deals and outcompete its largest competitors, it needs to leverage its community involvement and knowledge.

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The beauty of a community bank is that they are intimately involved in the communities they serve. They know who the active investors are, which projects have worked in the past, and they have a pulse on the local economy that a national bank would have a difficult time replicating. All of these factors give an advantage to community banks that their larger competitors do not have.

Even if a community bank isn’t quite able to match the loan terms of their national competitors, their knowledge of their local market typically makes up the difference.

Using Technology as An Advantage

The last and arguably most important way community banks can stay competitive is through the adoption of technology. By doing so, community banks can start winning more deals and set themselves up for success moving forward.

For technology related to commercial real estate lending, there’s no better option than Finance Lobby. Finance Lobby is making it easier than ever for lenders to save time, find perfect-fit deals and increase their close rate by streamlining the deal-finding process.

screen shot of Finance Lobby deal match

The days of being able to find deals by making phone calls or waiting for a deal to walk through your door are quickly coming to an end. Borrowers now expect lenders to have an online presence and want to be able to complete transactions without ever stepping into an office if necessary. Finance Lobby makes all of this possible by getting rid of the banking industry’s outdated methods and putting deal-finding power in the hands of lenders.

Through Finance Lobby’s online marketplace, lenders can see every deal in the market that meets their lending criteria. From preferred deal size to type of property, lenders can specify exactly what they are looking for so that no time is wasted analyzing deals that won’t work.

Better yet, Finance Lobby also significantly reduces the amount of back and forth once a deal is found. When a lender finds a deal that works, all of the details related to what is important to the borrower are provided upfront, taking all of the guesswork out of making an accurate quote. Any relevant documents or financial information are also provided, eliminating the headache of missing information.

There’s a reason fintech has already made a significant impact on the residential lending industry – it works. If community banks want to remain competitive in the commercial lending world, they must get ahead of the curve and integrate technology like Finance Lobby into their processes today.


We hope this article served as a helpful playbook for how community banks can stay competitive and win more commercial real estate deals. With the right amount of effort and the power of Finance Lobby backing them, there’s no doubt that community banks can be met with great commercial lending success.

Give Finance Lobby a try. It’s free to create your personalized lending profile, and it only takes 30 seconds to get started.

November 11, 2021