Documentation for Commercial Loans
Documentation that you need to support your claim for commercial loans typically depends on whether the property is an investment property or an owner occupied business. Some lenders often require a personal guarantor, for which you should be ready with one.

We advice our clients about documents they would need to make a successful loan application.

Investment Property
A property may be termed as an investment property if rents collected from the property becomes the main source of paying mortgage and other property related expenses.

For investment property a lender letter of interest (LOI) or pre-approval, which details rate and terms needs to be issued for which documentation required, are as follows:

For initial review

• 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)

After initial review, the following documentation is required:

• Lease agreements
• Appraisal
• Insurance information
• Payoff information

Owner-Occupied Property
Owner-occupied properties are those where the source of loan repayment is the owners business (even if held as a separate entity).

Owner-occupied property can often be partly leased and part-owner occupied. For such type, a lender letter of interest (LOI) or pre-approval, which details rate and terms needs to be issued

Initial documentation required for issuance of LOI or pre-approval includes:

• 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)

After initial review, the following documentation is required:

• Appraisal
• Insurance information
• Payoff information

New Construction or Substantial Rehabilitation:
New construction or substantial rehabilitation requires the following documentation:

• Brief executive summary explaining the use and income source from the property and background of the organization to be the proposed real estate
• Simple summarization of Construction Costs
• Plans and Specifications for construction
• Most current rent roll if the loan is for acquisitions with substantial rehabilitation.
• Some lenders also require additional documentation such as resumes for all principals, environmental reports, photos, old appraisals, additional operating history, letters of explanation, aging reports, etc.