Checklist: What You’ll Need to Get a Commercial Real Estate Loan Offer

Tim Milazzo
May 12, 2017

What is the right time to seek out financing for a commercial real estate project? The process can sometimes take a while from soup to nuts, so the earlier you can have your ducks in a row, the better. Here we’ll cover the items you need to have ready in order to line up financing quotes from lenders.

The Checklist

☑ Property

The first item that is required to get a loan on commercial real estate shouldn’t surprise you — it’s the real estate! The vast majority of commercial mortgages are tied directly to the underlying properties they are used to leverage. Sometimes a developer might receive a line of credit, we’ll focus here on property-level debt.

If you already own a property and are refinancing, this part is taken care of. For acquisition loans, you’ll need to be ready to give the lender the property address that you are acquiring with their loan as the very first step.


Once the property is identified, the second question is what you’re doing with it. Is it fully leased up, so you’re looking to maintain the current cash flow? Will you be improving the property physically or otherwise? Will you manage the property yourself or hire a management company to look after it for a fee? Building the plan, and being able to tell the story of how you’ll make money above and beyond what is owed to your lender is the most important part of working with potential lenders.

Pro forma

At the center of your plan for a real estate asset is your set of financial projections, or Pro Forma. The pro forma lays out expected operating revenues and expenses for the property over the lifetime of your desired financing. If you want a five year loan, you’ll need a five year pro forma analysis ready. A lender may have their own view as to how well your building may perform financially, but starting with your own well-built pro forma analysis will strengthen your case that your property investment is ready to be leveraged.

☑ Principal

If you’ve built your pro forma reasonably, you know that the first portion of the capital needed for the investment comes from the sponsor (lead investor). This portion is the Equity (ownership) in the deal, and while it doesn’t need to all come from one source, you won’t have any luck finding a loan without sufficient equity committed to the deal.

☑ Personal info

Beyond property-specific information, a lender will also evaluate your own track record and financials, particularly if you’re in a Recourse loan scenario (Recourse refresher). Be ready to share personal information with prospective lenders in addition to your property plan.

Once you’re ready

If you have everything you need and you’re ready to reach out to lenders for quotes, you’ll now need to make contact with the right lenders. Since different lenders have different loan parameters and areas of focus, you can spend a significant amount of time tracking down the right lenders yourself and delivering your asset’s story over and over.

We built StackSource to end the madness and connect you directly to lenders selected by our algorithms when you enter a single loan request. You’ll be matched to a set of lenders that are appropriate for your deal in just 10 minutes. Read more about how it works, or try it now.

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