How to Prepare a Commercial Loan Package for a Lender

 Printer / PDF Version:  How to Prepare a Commercial Loan Package for a Lender or Investor

A Loan Package is typically used for Real Estate Development Projects and Acquisitions, but there are parts of the Loan Package which are applicable to the other types of Business and Commercial Loans.  If you are seeking a Loan from a Commercial Lender or Funding from a Venture Capital Firm, it is very important to present a well organized, detailed Loan Package.  The Loan Package gives the Loan Officer/ Venture Capitalist the necessary information to gauge the viability of your loan request, enabling them to provide you a specific loan term sheet and commitment.  All Lenders have different requirements, so customize your Loan Package to their parameters.

v  Organization Tips:

Loan Packages are voluminous and paper intensive so it is very important that it is well organized with a detailed Table of Contents and alphabetical Tabs indicating different Sections, correlating to the Table of Contents.  This way the Loan Officer can easily find the necessary information in the Loan Package when analyzing and assessing your Loan Qualification and the resulting Terms. 

The Loan Package should be bound in paper form, as well as, scanned to a DVD Disk using Adobe Acrobat to suit the Lender’s particular preference.  Mail the Loan Officer a bound, paper copy along with the DVD.  This way the Lender can print out different sections for various Loan Committee members and decision makers.  The DVD should be well organized, with each Section of the Loan Package as a separate, labeled Folder, all presented in the order indicated in the Table of Contents.  The first Folder on the DVD should contain the Table of Contents indicating the Section Names with their applicable Tab Letter (the Alphabetical Tab Letter should appear in the name of the particular Section’s File).

v  Loan Summary:

Preceding the Loan Package document is a Loan Summary, two to three pages in length, which summarizes the important parts of your Loan Request.  The Loan Summary is the first section in the Loan Package and can also be used as a stand alone document to generate and gauge interest in your project.  If used as a stand alone document, it should be accompanied by the Long Form Executive Summary.  The Loan Summary is to a Loan Package what an Executive Summary is to a Business Plan, a summary of the key aspects and facts of the overall Loan Package.  For this reason, the Loan Summary should be developed after the Loan Package is completed. 

Ø  Suggested Loan Summary Format:

1)     Company Information

2)     Project Description

3)     Company/ Project Principal’s Experience Summary

4)     Sources & Uses of Funds

5)     Requested Loan Terms

6)     Summary of Assets & Collateral

7)     Project Financial Summary

8)     Current Company/ Project Financial Summary

For more information on developing a Loan Summary, please consult ABC Business Consulting’s Comprehensive Business Plan Guide & Workbook.

v  Loan Package Format:

1)     Table of Contents

2)     Loan Summary

3)     Company/ Project Information, Contact Details & History

4)     Principals’ Backgrounds, Experience & Resumes

5)     Key Project Employees, Executives & Managers’ Experience and Responsibilities

6)     Company & Project Organizational Chart

7)     Company Registration

8)     Project Description

9)     Project Pictures & Renderings

10)   Key Roles & Relationships:  Company, Strategic Partners, Third Parties and Government

11)   Sources & Uses of Funds

12)   Company & Project Collateral, Assets, Liens and Loans

13)   Schedule of Real Estate

14)   Rent Roll

15)   Company & Principals’ Credit Standing and Credit Reports

16)   Principals’/ Company Financial Statements

17)   Company Balance Sheet

18)   Project Budget

19)   Company & Project Cash Flow Statements

20)   Pre-Sale Commitments

21)   Project Appraisals & Valuations

22)   Project Studies, Feasibility Studies, Business Plan, Consulting Studies and Engineering Studies

23)   Project Proposals and Contracts, Lease Agreements & Escrow Agreements

24)   Title Policies

25)   Annual Reports

26)   Tax Returns:  Personal & Business

27)   Project Strategic Plan & Time Line

28)   Project Construction Plans, Specifications, Drawings, Surveys and Maps

29)   Project Construction Cost Breakdown

30)   Construction Cash & Finance Disbursement Schedule

31)   Project Construction Cash Flow Statement

32)   Project & Company Advisors, Consultants, Contractors, Construction Team, Legal Firms, Accounting Firms and Engineering Firms

33)   Appendix

For more details on each of the Loan Package’s Sections and developing an Effective Loan Package, please consult ABC Business Consulting’s Comprehensive Business Plan Guide & Workbook.

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