13 Steps to Getting Your Commercial Property Loan Approved by Lenders
Although there are very few financial companies like New City Financials who will help you in every possible way to get you commercial property loan approved by lenders, there are some things which you should know or better say some things with which you should be ready to get your loan approved quickly. Here are 13 items which one should attach to his/her loan application package.
1. Executive Summary
It should have all important dates of project like expiry date of due diligence, effective date, closing date, etc. In case of Section 1031, any important dates should be added so that it can be processed smoothly.
If there is any old appraisal on property, it can be added to the package. Although a separate appraisal will be ordered by lender for a comparable property which last appraiser used for determining the property value.
3. Financial Statement
In case the borrower holds a weak financial statement, a strong partner can be introduced for dealing. They call this person as “sponsor” and his/her financials will be added to the package.
4. Credit Report
When the broker’s good Faith Estimate and release of information sheet is signed, he/she provides this report. This report works as a risk management tool for lender and it contains some elements which let the lender know about you.
5. Sponsor’s Financial Statement
If you are using a sponsor to qualify for the loan, then you will require his/her retirement accounts, bank accounts, property owned, cash equivalent accounts, etc.
6. Property Financials
Requirements include property’s financial statement, bank accounts, last 3 years profit-and-loss statement, tax return (three years), incorporation articles or articles of organization, all leases, debt schedule, and original policy of title.
7. Resume of Borrower
As this is the opportunity for selling yourself, so add your accomplishments like any real estate deals, any relevant activity or training you are involved with.
8. Sale and Purchase Agreement
A signed copy of sale and purchase agreement along with property’s legal description should be added.
9. Property’s Legal Description
Your broker or Title Company with which you have built the relationship should provide this report.
10. Property’s Pictures
The photos of the property should be added to the package. So, chose some perfect angles and get the photos of your property.
11. Property’s Location Map
In the package, place a map of the property’s location. This way bank will get to know the exact location of the property.
12. Environmental Information
Environmental information is required to determine whether the property is free from any kind of hazards or not. If copies of previous Phase I and Phase II Environmental reports are there, add them.
13. Property Management Documents
The documents of property management should be included as they are the most vital package parts because the lender will seek the information as who will be managing the property.
So, these are the 13 steps which one should follow to get the commercial property loan approved by lenders.