Commercial Loans
Documentation needed for commercial loans usually depends on property type and whether the property is considered as an investment property or an owner occupied business. Sometimes, lenders may even require a personal guarantor.
Investment Property
Any property where the rent collected is the main source of paying the mortgage and other property related expenses is considered as a investment property.
Required for issuing a lender letter of interest (LOI) or pre-approval, which details rate and terms:
- Rent Roll / Schedule of Leases
- 3 years P&L (or appropriate schedule from tax return)
- 3 years personal tax returns for personal guarantor(s)
- Personal financial statement for personal guarantor(s) (or residential loan application)
- Purchase contract (if a purchase)
- Credit report (tri-merged, we will run)
Once the initial review is over, the following documents will be needed:
- Lease agreements
- Appraisal
- Insurance information
- Payoff information
Owner-Occupied Property
Any property where the source of loan repayment is the owners business (even if a separate entity) is defined as an owner-occupied property. Additionally, if the property is partly leased or partly owner occupied, then the following documentation would be required.
The following documents are required for issuing a lender letter of interest (LOI) or pre-approval that details rate and terms:
- 3 years business P&L and Balance Sheet
- 3 years business tax returns
- 3 years personal tax returns for personal guarantor(s)
- Personal financial statement for personal guarantor(s) (or residential loan application)
- Purchase contract (if a purchase)
- Credit report (tri-merged, we will run)
Once the initial review is over, following documentation would be required:
- Appraisal
- Insurance information
- Payoff information
New Construction or Substantial Rehabilitation:
Following are the documentation required for new construction or substantial rehabilitation loans:
- Brief executive summary explaining use and income source from the property and background of the organization to be the proposed real estate.
- Simple recap of Construction Costs
- Plans and Specifications for construction
- Most current rent roll if the loan is for acquisitions with substantial rehabilitation.
Note: documentation required by lenders are usually the same, however, some lenders may also require additional documentation such as resumes for all principals, environmental reports, photos, old appraisals, additional operating history, letters of explanation, aging reports, etc. |
