Prepare yourself to meet your banker
Commercial Real Estate Articles November 8, 2003
Your banker will ask you a set of screening questions when he meets you. Make sure that you know the answers in order to facilitate the process and move it along as fast as possible. I while back, I wrote a list of financial information that is necessary for any loan request, that documentation will still be needed. In addition, the following information will also be required when dealing with a commercial real estate loan.
Note: This list is subjective and list the minimum that I would personally ask. You will be asked more or less depending on the lender and instituton.
The banker will want to know how long and how deep the relationship with the bank is Look at it this way: Joe walks in from the street with no relationship to the bank and says to the lender "Hello, my name is Joe, and I am wondering if you could help me get a loan to buy a property for my business". On the other hand, Steve walks in and say "Hello, my name is Steve. I have been banking with XYZ since 1996 both personally and business, I currently have a line of credit for my business with your bank and I am looking for someone to help me finance a property for my business". You want to take it even further, talk to the person in the bank that deals with your account in a daily basis. This person will refer you to the appropriate individual in the bank or help you along. If your first contact is not a commercial lender and even if it is, I recommend making a questionnare of these points along with the answers and taking it to the meeting.
Where is the property located Sounds silly doesn't it? But, bringing the address and the folio number of the property helps.
Full description of the property Saying that it is a commercial property is not enough. I would personally like to hear a description such as "Is an 8,000 Square foot warehouse with about 700 Square foot of air conditioned office space. One story building built in 1985 with an 800 Square foot cooler added three years ago. The lot is 12,000 Square foot and is currently being used by a grocery wholesaler that is moving to a bigger location. It has a dock and it is really close to the highway." There is no such thing as too much detail.
This is getting a bit long so I am going to split it into parts click here for the next part.
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