How Commercial Loan Processing Works

When you submit your Commercial loan application, it may seem like it disappears into a black hole. But understanding how the commercial loan processing system works can help reduce your anxiety while you wait for the approval.

 

Petra Garza likes to prequalify potential borrowers to determine how much they can afford. This will also give you and Ms. Garza an opportunity to see which loan program would be most appropriate for your needs. She will gather basic information, such as your income and existing debts. To initiate the loan process, you must then complete and submit a loan application. 

 

Once your application is received, a Petra M. Garza or her processor will review your credit reports, the amount of available collateral, and your income. She will then determine if any additional documentation is required, such as personal financial statements. If you are purchasing real estate, you may also need to submit preliminary environmental reports, area maps, title reports, property appraisals, and lease summaries. I will package your loan request and submit it to several lenders for approval.

 

After your commercial loan package is submitted to the decision-makers — either a loan committee or underwriter — the processor will present you with a letter of intent or term sheet. This is a formal document intended to ensure that all parties involved (Petra's company and your company) are on the same page. The letter of intent may include the names of involved parties, the amount of financing, type of security (collateral), and other key terms. Decisions are usually made in one to five days. During the underwriting process, you may need to furnish additional documentation.

 

Petra along with her team of experts should be helping you negotiate the best terms, fees, and conditions from various lenders. The next step is choosing the most attractive offer, and signing and returning the final letter of intent along with a check, if required, for a deposit, and to pay for third-party reports, such as appraisals.

 

After all, third-party reports are successfully completed and underwriting conditions are satisfied, the final loan package is resubmitted to the loan committee for final approval.  At this point, the lender will issue a final full loan commitment. If your loan is approved, your closing agent, who may be an attorney, a title company, or escrow company representative, will receive closing documents. Your closing agent will record or file deed transfers and mortgages, order title insurance, coordinate the exchange of funds, and arrange for you to sign the loan documents. Closing can take place within days of approval or underwriting. At the closing, the lender funds the loan with a cashier’s check, draft, or electronic wire transfer.

 

And Finally- Last but not least, Congratulations!!!! You will Own Your Very Own Commercial Property!!!