Commerical Loan documenation requirements needed for credit analysis
Borrower Information
- Collect tax returns for the past three years.
- Include both personal and business tax returns.
- Ensure the returns are signed and filed with the appropriate tax authorities.
- Obtain a copy of the borrower's business plan.
- Review projections for revenue, expenses, and cash flows.
- Assess the feasibility and viability of the business plan.
- Request documentation showing the borrower's ownership structure.
- Include articles of incorporation, partnership agreements, or operating agreements.
- Verify the legal structure and ownership percentages.
- Obtain the borrower's credit history from credit reporting agencies.
- Collect references from previous lenders, suppliers, or clients.
- Evaluate creditworthiness and reliability.
- Request the borrower's personal financial statement.
- Include details of personal assets, liabilities, and income.
- Collect bank account statements to verify financial stability.
- Collect a list of the borrower's current assets.
- Include cash, accounts receivable, inventory, and investments.
- Gather information on current liabilities, such as loans and payables.
- Request copies of any legal and business certifications.
- Include licenses, permits, or registrations required for the industry.
- Ensure all necessary certifications are up to date.
- Perform a background check on the borrower.
- Include criminal history, litigation records, and regulatory violations.
- Assess any potential risks or red flags.
- Calculate the borrower's debt-to-income ratio.
- Assess the borrower's ability to generate sufficient income to service the loan.
- Consider other existing debts and financial obligations.
- Identify and assess any collateral provided by the borrower.
- Include real estate, equipment, inventory, or other valuable assets.
- Evaluate the value and marketability of the collateral.
- Evaluate the borrower's experience in the industry.
- Consider their track record of success or failure.
- Assess their knowledge and expertise in the specific sector.
Use in Manifestly