Brokers dismissing investor support and lender prequal letters?

August 20, 2025

by a searcher from University of Pennsylvania - The Wharton School in Philadelphia, PA, USA

Anyone else have experience with brokers outright dismissing investor letters and lender prequals? Wondering if this is a greater trend or just a few ill-informed brokers. I'm still early on in my process, but I've had 2 brokers outright tell me they won't consider letters from equity investors or lenders (not to mention others who might just not respond.) This isn't to say I haven't gotten good responses from the rest, but it would be remiss for any broker to not consider every buyer that can put forward a legitimate offer for their client. In one of those cases, my PFS by itself was more than the 10% equity required -- wonder if some brokers just have an allergic reaction to these letters.

Reply by an intermediary
from The University of Chicago in Chicago, IL, USA

Brokers often get directions from seller. For example, if a seller wants to continue after the sale, Searcher class will be ruled out due to 12 months limitation. I am currently working on a deal where the seller wants to approve each buyer before sending the CIM. A while ago, the seller said no buyer unless the buyer has enough skin in the game. Most sellers understand that buyer borrows from a bank, but small business sellers are shocked when they learn that even the equity is pulled together from investors. Market is big enough for brokers, sellers and searchers. One size does not fit for all.

Reply by a searcher
from Concordia University in Montreal, QC, Canada

The only angle I can see where a pre-qual is 'rejected' is the substance of the prequal. What I mean by that is if the bank has yet to really grant the money, or the investor backer still needs to do due diligence or be convinced of the investment before they release funds, then I can see why a broker would have apprehension. As a broker I would say we accept all offers and show all to our clients, but we would put some color on the strength of the offer if we're uncomfortable with how secure the funding is.

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