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Standard Basic Package For Commercial Real Estate Loan
The following is a basic package of information that will satisfy many funders of commercial real estate loans. This list is intended to get the transaction through the underwriting process. Additional items may be necessary to actually complete the loan, depending on the situation.
**note** We do not need all of these documents to get the process started. If you are just submitting a NEW commercial real estate loan, please prepare only the items on the Real Estate Checklist.
Real Estate Checklist
Application: Complete credit application identifying 100% of the company ownership, with all bank, debt reference, and trade reference phone numbers confirmed, and signed by company officer or owner.
Copy of Articles Of Incorporation, DBA Statement, or front page of partnership agreement showing official name of the business.
Interim Statements (Comparative): Copy of fiscal year-end financial statement for each of the three most recent years including income statement, balance sheet, cash flow statement (if included), and all notes.
Most recent internally prepared month-end/year-to-date interim income statement and balance sheet, plus the income statement and balance sheet for the corresponding month of the previous year. For example, December 31, 2007 and December 31, 2008.
Business Tax Returns: If business is a partnership or corporation with compiled statements, or if a CPA does not prepare financials, include three most recent years' federal income tax returns (no state or provincial returns). Include all pages of each return. If client has reviewed or audited financial statements, do not include tax returns unless an interested funder requests them.
Personal Tax Returns: Three most recent yearly personal federal tax returns (no state returns) for each guarantor. Include all pages of each return. For a sole proprietorship, the business tax return and the personal tax return are the same, with the business profits accounted for on Schedule C.
Personal Financial Statement: Personal financial statement for each guarantor, signed and dated within the most recent 90 days. The value of a guarantor's share of a privately held corporation is shown as "Unlisted Stock", and is equal to his/her proportionate share of the corporation's Stockholders' Equity.
Company Information: Company sales brochures or any other easily read, colorful material that describes what the company does or sells.
Property Information: Copy of the most recent appraisal available, even if it is two or three years old. Do Not have a new appraisal done yet, because each lender has it's own list of appraisers it uses. A lender will often not use an appraisal performed by an appraiser not on its list. Therefore, wait for an interested funder to issue a written contingent loan approval or contingent commitment. This means the lender will do the loan, subject to such details as a current appraisal.
Rent Roll: Complete rent role covering the past twelve months.
Executive Summary: Prepare a write-up about the client company or borrower, and what it does. Describe the need for the loan, and how the loan will further improve the client company's profits by saving money or by generating more business, or both. Brevity is vital! The reader should be able to understand the highlights of the deal within the first two paragraphs.
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K2 Commercial Finance will provide you with all the forms necessary to make a complete and proper submission.
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