All Forum Posts by: Michelle Reid

Here's the quick rundown of how the commercial loan process works.

1. Secure property and submit preliminary docs to secure a term sheet from lender
2. Accept terms and send funds for 3rd party reports and UW
3. Submit needed loan docs to underwriter and get corporate structure finalized/approved by lender
4. 3rd party reports are finalized, reviewed, and approved. Final adjustments are made based on 3rd party reports and could include adjusting the loan amount, LTV, and/or making repairs to the property or requiring funds be held back to conduct the repairs post closing
5. Pool the needed funds to close in preparation for closing.
6. Commitment to lend is issued and closing is scheduled and rate is locked immediately before closing.
7. Close.

That is the basic process no matter if you use a bank or a large CMBS lender. How many steps are involved in each component of the loan depends on a myriad of factors such as size of the property, type of lender, type of loan (bridge, mini-perm, perm), if there are loan/credit committees,

 @Darryl Dahlen with this process,  how does one get pre- qualified for a commercial loan?  Is that even an option in the commercial space?  Will a seller take your offer seriously with no proof of financing?  I'm in MA looking to buy on NH.  Properties go FAST.  By the time I'd get to meet with a few banks, have then analyze me and the property, the property is long gone.   How does this process work for the first- timer?