Commercial Loan Documents

Commercial lenders require certain kinds of commercial loan documents when underwriting a commercial loan. These documents can differ depending on the type of commercial loan that is being applied for as well as the amount of the commercial loan. Commercial lenders generally follow a set of guidelines that requires them to obtain different documentation from the business and the individual business owners if needed.

Some of the documents that may be requested at the time of a commercial loan for investment property include:
• Rent roll and schedule of losses
• Three years of profits and losses or an appropriate schedule from a tax return
• Three years of personal tax returns for personal guarantors
• Personal financial statements for personal guarantors
• Purchase contract
• Credit report
• Lease agreements
• Appraisal
• Insurance information
• Payoff information

The commercial loan documents that are required when applying for an owner occupied property include:
• Three years of business profit and loss statements and a balance sheet
• Three years of business tax returns
• Three years of personal tax returns for personal guarantors
• Personal financial statements for personal guarantors
• Purchase contract
• Credit report
• Appraisal
• Insurance information
• Payoff information

Commercial loan documents that are needed for new construction or substantial rehabilitation of properties:
• Brief executive summary that explains the use and income sources that will be used for the property and the background of the business to be the proposed real estate loan
• Simple description of the estimated construction costs and operating costs
• Plans and specifications that are needed for construction
• The most recent rent roll if the loan is used for acquisitions that have substantial rehabilitation needs

Each commercial lender may require different or additional documentation depending on the kind of the commercial loan and the personal history and operations of the business. When applying for a commercial loan, it is important that you have all of the required documentation and are organized and ready to present you information to the lenders.

There are a number of factors that can influence the lenders when approving a commercial loan, and they may request additional information at any time during the process. Some lenders also require a lot of the commercial loan documents up front when the application is being processed, and some may not require all of the documentation until the loan is in process. If the lender finds that they need to acquire more information on the property that is being financed they may ask for additional property value information to be obtained. Additionally, if the business has not been in operation for a certain amount of time, they may require that the personal financial statements and documents from the individuals also be presented to prove the credit worthiness of the applicants.

It is always good to be fully prepared for the commercial lenders when applying for a commercial loan and be ready to present them with any information that they may need.