How to Prepare a Loan Package For a Bank Or Lender

A loan package is typically used for real estate development projects and acquisitions, but there are parts of the package which are applicable to the other types of business and commercial loans and finance. If you are seeking a loan or funding from a commercial or business lender or funding from a venture capital firm or investor, it is important to present a well organized, detailed loan package. The package gives the loan officer, investor or venture capitalist the necessary information to gauge the viability of your loan or finance request, and in turn, providing you a loan term sheet and commitment. All lenders and funding sources have different requirements, so customize your finance package to their parameters.Loan packages can be voluminous and paper intensive so it is important that it is well organized with a detailed table of contents and alphabetical tabs indicating different sections. This way the loan officer can easily find the necessary information in the package when analyzing and assessing your loan qualification and the resulting terms.The loan package should be bound in paper form, scanned to a disk and available for online download. If you are mailing to the Loan Officer a paper copy be sure to include the package on a disk as well. This way the lender can print out different sections for various loan committee members and decision makers. The disk 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, which should be the first folder on the disk.Preceding the loan package document is a loan summary, two to three pages in length, which summarizes the important parts of your loan or finance request. The loan summary is the first section in the loan package and can also be used as a standalone document to generate and gauge interest in your project. If used as a standalone, it should be accompanied by an 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 summary should be developed after the loan package is completed.Below you will find a suggested format for the loan summary and package. Amend them to suit your particular project and funding request.Suggested Loan Summary Format – company information, project description, company and project principals experience summary, sources and uses of funds, requested loan terms, summary of assets and collateral, project financial summary, current company and project financial summarySuggested Loan Package Format – table of contents; loan summary; company and project information, contact details and history; principals backgrounds, experience and resumes; key project employees, executives and managers experience and responsibilities; company and project organizational chart; company registration; project description; project pictures and renderings; key roles and relationships – company, strategic partners, third parties and government; sources and uses of funds; company and project collateral, assets, liens and loans; schedule of real estate; rent roll; company and principals credit standing and credit reports; principals and company financial statements; company balance sheet; project budget; company and project cash flow statements; pre-sale commitments; project appraisals and valuations; project studies, feasibility studies, business plan, consulting studies and engineering studies; project proposals and contracts, lease agreements and escrow agreements; title policies; annual reports; tax returns – personal and business; project strategic plan and time line; project construction plans, specifications, drawings, surveys and maps; project construction cost breakdown; construction cash and finance disbursement schedule; project construction cash flow statement; project and company advisors, consultants, contractors, construction team, legal firms, accounting firms and engineering firms; appendixGood luck with your funding initiative!

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