An overview of the commercial loan process

Make no mistake, todays lending standards have changed and now more than ever its essential that the proper expectations are set at the very start of the loan process.  Securing a commercial mortgage for an investment property, or owner occupied business, requires experienced professionals to guide you through current market conditions.

You wouldn't be here on our website if you could fill out a one-page application and get the best loan for you funded the same day. What we do is most of the heavy lifting for you, so you can concentrate on what's important.

To establish the expectations from the start, there are (7) primary steps involved in getting a commercial loan, once you have a property under contract.  Typical commercial contracts should include a 30 to 45 day due diligence period, with a closing date of 60 -90 days, depending on a number of flexible elements that all need to be managed by experienced professionals.  The contract should include:

 

Step one: Engagement of your loan broker With the agreed success fee and Engagement Agreement from United Lending, you employee United Lending to perform the steps to secure your funding.  United Lending will prepare the loan to submit to multiple lending sources.  Our initial primary function will be to. Package the loan application Pre-underwrite the property for loan submission to targeted funding sources Prepare an Executive Summary of all financial facts about the property, the borrowers, and supporting market data

Step two:   Pre-underwrite the property for loan submission to funding sources With a commercial mortgage, underwriting approval will depend primarily on the properties ability to generate a current "net operating profit", sufficent enough to cover the debt service of the loan to finance the property, pay all operating costs, and yield a cash on cash net operating profit to meet your own investment goals. Based on standard lender guidelines from the targeted sources, we'll provide you an educated scenario of what kind of terms and loan program the property will most likely qualify for, and more importantly we will identify the possible methods to reduce the property current costs, and/or improve net operating income by employing methods to improve income. Once the targeted lenders receive the United Lending prepared informative and impressive Executive Summary that has been pre-underwritten,  the lender  issues their pre-qualification of the loan.   1. The pre-qualification from the lender is called a  LOI, “letter of interest”.  This letter details the conditions upon which that lender will issue a "term letter".

Step three: Supply all supporting documentation in the terms of the Letter of Interest. This is where the rubber meets the road. All supporting detailed documentation is supplied to the lender supplied in the "executive summary" about the property's financial history, the borrowers own credentials, such as employment, assets, residence history, credit scores, and so on.   The lenders then will issue their "Term Sheet".

Step four:  The Term Sheet

United Lending will review the multiple term sheets received by the funding sources with you.  A funding source will be selected, and at that time you agree to the terms from the lender in the "term sheet". Any deposits required to secure the terms of the loan are sent to the lender with the signed term sheet. At that time, the lender orders the appraisal report directly, and any other supporting third party reports such as Environmental Inspections.    All terms sheets will condition the approval on the appraisal results. Your realty agent and the seller's will work together to co-ordinate the on -site appraisal and any other inspections, and also designate a "targeted" closing date with the selected escrow/title company to handle the funding of your loan once a final approval is received after appraisal.  We'll coordinate with the escrow company to make sure all the papers your lender will need are in order, and you'll sign everything at the escrow/title company's office, or according to the contract terms.

You've answered a few questions, given us some detailed information, applied online, and next thing you know, you're funding! We're in the business of making commerical mortgage loans -- so we do most of the work. Doesn't that make sense?

6. Lender issues commitment letter

7. Clear to close

8. Funding