The Initial ApplicationA significant amount of paperwork and time is involved with processing commercial loans. For this reason, a scaled-down loan application is generally used for initial financing requests. This allows the lender, broker and borrower to avoid wasting a lot of time processing a deal that isn’t going to close.If your application is well-targeted and well-constructed, you’ll probably receive a conditional loan pre-approval letter from your lender. While pre-approval isn’t a commitment, it is a very important document. Your pre-approval letter is in fact an expression of interests by your lender in making the loan and an estimation of the eventual terms. If all of your information checks out, there’s an excellent chance your transaction will close on terms very similar to those agreed upon.Final loan approval will be subject to many factors, including a satisfactory appraisal, approval of the borrower’s financial statement and credit report, and a more detailed analysis of the property’s cash flow. The key is to respond quickly to your lender’s due diligence requests.Each commercial loan is an important project, both for the borrower as well as for the lending institution. In today’s unstable lending environment loan parameters have tightened and underwiriting processes have become more rigorous. This may be a blessing in disguise, because sometimes, lenders save anxious prospective borrowers from making very expensive mistakes.It is more important than ever to go into the loan underwriting period fully prepared for a thorough and at times frustrating process. Time and again I have seen that good deals, when properly presented, are still getting multiple loan offers. Making your underwriter’s job easy sends the message…”Hey Lender, I’m a Pro”…and will get you to the closing table with the least amount of frustration and delay.