Preparing a Loan Presentation Package
How can you improve the likelihood of securing the best commercial mortgage terms and conditions? By preparing a loan presentation package.
Why? Your lender’s review consists of both property and borrower underwriting. Your lender needs to understand what your plan is for your property. Demonstrate that you have the business and ownership savvy and financial capacity to be successful with the property.
A Business Plan for your Property
What is a loan presentation package? It is for the most part a business plan for your property. Your plan will:
–Describe your property, it’s location, and the market within which it is located;
-It will provide details as to the property’s income, and
-It will detail the ownership of the property, as well as the owner’s financial strength and real estate experience.
Here is a recommended format:
1. Executive Summary
- provide summary of key points
- allows lender to quickly decide whether your loan merits further consideration
2. Property Description
- building and design features
- property features
- environmental influences
3. Location/Market Discussion
- market conditions
- location discussion
- traffic discussion
4. Income/Expense Analysis
- income/expense presentation
- projected and historical cash flows
5. Ownership/Sponsorship Discussion
- financial capacity
- experience and expertise
Presenting your loan proposal isn’t complex or intimidating. You, or your Mortgage Broker, can present your proposal with confidence. Use this format to think like your lender, anticipate their questions, understand their concerns, and effectively promote your proposal to your advantage. You’ve set yourself up for success!