Finding the right commercial lender for you is an exciting thing and you more than likely cannot wait to see what comes next. However, if you are like most people, you may be a little unclear as to what happens after you submitted your business loan package to your commercial lender.
Once you have submitted your business loan package to your commercial lender the real fun begins or rather the waiting game. Of course, not knowing if you are approved yet can be stressful. But, the good news is that most lenders work relatively quickly in order to get you approved. For instance, some lenders even pre-qualify or pre-approve their borrowers just to ensure that the ball keeps rolling. It is during this pre-approval stage that your lender will determine what programs are best for you and how much you can afford.
Additionally, your lender will go over the presented documentation and make sure they have everything they need to assess your existing debt and income. Your lender will also appraise your collateral, check credit reports and start the process for preliminary reports and/or summaries. After these details are taken care of, it is now up to your lender’s committee or underwriter to make a final decision (decisions are usually made in approximately five business day and you are notified via a letter of intent).
When they reach a final decision, the next step is to figure out the right terms, conditions, and fees for your business venture. If you have chosen to work with a broker, this is where he or she would step in and ensure that you choose the best commercial loan program for your needs. If you opted not to work with a broker, which is completely up to you, then you should make it a point to seek the advice of counsel or a trusted business associate to ensure that there are no hidden surprises in your terms.
After all of the above-mentioned steps or stages occur, it is time to get your pen out and sign the necessary documents. It is also time to order appraisals, any other third-party reports, and take care of any last minute details such as a deposit if one is required. Next, you will want to satisfy any and all underwriting conditions so that your business loan package can be re-submitted for final approval. Upon final approval, your lender will provide you with what is called a loan commitment. Once you receive your loan commitment letter and your loan is approved, there is really only one step left, which is to receive the closing documents and move forward with your closing.
Ultimately, this is the gist of processing your commercial or business loan. One final note, closing typically occurs a few days after final approval or once the underwriting process has been completed. Thus, as you see, though this process is complex, things tend to move along rather quickly so there is no need to worry for an extended period of time once you sent in your business loan package.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.