The loan package lenders want for a commercial property, and how to build it yourself

The short list every commercial lender will ask for

A commercial real estate loan package has three parts: property documents that show what the building earns, sponsor documents that show who you are and what you can carry, and entity documents that show who is borrowing and who can sign. Expect to provide a trailing twelve-month operating statement, a current rent roll, the purchase contract or your existing loan documents, a personal financial statement, a schedule of real estate you own, recent tax returns and your LLC paperwork. The lender then orders the appraisal and other third-party reports. Most borrowers can assemble their part in a week or two if they start before they need it.

At Terrydale Capital we underwrite every deal before it goes to a lender, and the quality of the package is one of the biggest factors in how fast and how well a loan closes. A complete, consistent package gets read as a serious borrower. A package with missing months and numbers that do not tie together gets pushed to the bottom of the pile, or priced as if the lender has to assume the worst.

Property documents: the numbers your loan is sized from

Lenders size commercial loans from the property's income, so these documents carry the most weight. Provide them in the cleanest form you have, and make sure they agree with each other: the rent roll should support the rental income on the operating statement, and the operating statement should match your bank deposits.

• Trailing twelve-month operating statement, plus the prior one or two full years if you own the property
• Current rent roll with unit or suite, tenant, lease start and end dates, rent, deposits and concessions
• Purchase contract and any amendments for an acquisition, or the current loan documents and payoff for a refinance
• Property tax statements and your most recent insurance policy and renewal quote
• A capital expenditure history and any planned improvements with a budget
• For commercial tenants: copies of the leases and any estoppels already on file
• Photos and a short property description, including unit mix or square footage

Sponsor documents: showing you can carry the deal

Commercial lenders underwrite the people as well as the property. They want to see that the sponsor has the liquidity to cover reserves and surprises, the net worth to stand behind any guarantee, and the experience to operate the asset. First-time commercial buyers are financed every day, but they should expect more questions here and should answer them with documents rather than assurances.

• Personal financial statement for each guarantor, usually on the lender's form
• Schedule of real estate owned, with each property's value, debt, income and lender
• Two to three years of personal and business tax returns
• Recent bank and brokerage statements to verify liquidity
• A short resume of your real estate experience, especially with this property type
• Authorization for a credit check and background review

Entity and authority documents that slow closings when missing

Most commercial property is held in an LLC or partnership, and the lender needs to know exactly who the borrower is and who is allowed to bind it. These documents are easy to overlook until the lender's attorney asks for them in the last two weeks, which is the worst time to discover that an operating agreement was never signed or does not match the current owners.

Gather the certificate of formation, the signed operating or partnership agreement with every amendment, a current certificate of good standing, the entity's tax identification number and an organizational chart showing each owner's percentage. If the ownership has changed since the entity was formed, or partners disagree about authority, sort that out now. It will surface in underwriting either way.

Reports the lender orders, and why some are worth pulling early

After you sign a term sheet, the lender typically orders third-party reports, and you pay for them whether or not the loan closes. The appraisal establishes value. A property condition report looks at deferred maintenance and remaining useful life. A survey confirms boundaries, easements and encroachments, and the title commitment shows liens and exceptions.

The Phase I environmental site assessment deserves special attention. The EPA explains that under the federal Superfund law, owners can be held strictly liable for cleaning up hazardous substances, and that conducting All Appropriate Inquiries before acquiring a property supports liability protections for buyers who did not cause contamination. The EPA also notes that the ASTM E1527-21 standard can be used to satisfy that requirement. Lenders want the same protection, which is why a Phase I finding can stop a closing. If you already have a recent Phase I, survey or title policy from your own purchase, send it with the package. It tells the lender what to expect and can shorten the timeline.

If you would like someone to review your package before a lender sees it, this is a good point to reach out.

Clean up the operating statement before anyone reads it

In a guide on our site about the refinance timeline for Texas owners, we call fixing the operating statement the highest-return work in the entire process. Lenders underwrite your trailing twelve months and then normalize them, replacing your numbers with their own assumptions wherever yours look incomplete or unusual. The cleaner your statement, the fewer adjustments they make.

The same guide lists the work worth doing before the trailing twelve months are locked in. It applies whether you are refinancing or presenting a property you have owned for years.

• Review property tax assumptions against a likely reassessment, not last year's bill.
• Shop insurance before the trailing period closes, so the expense line reflects the best available premium.
• Clean up the rent roll and document below-market leases with executed renewals.
• Resolve deferred maintenance that will show up in the property condition report.
• Assemble entity documents and personal financial statements in advance.

Extra pieces for value-add, construction and short-term loans

When the loan is based on what the property will become rather than what it earns today, the lender needs to understand the plan. Our post on hard money in Texas lists what short-term lenders typically ask for: a property description and photos, an appraisal or comparables, the purchase price or payoff balance, a line-item renovation budget, a written exit strategy, the sponsor's experience and entity documents.

The written exit strategy is the piece borrowers most often skip, and it matters most. If the plan is to refinance into permanent debt, show the occupancy, income and coverage the property needs to reach, and when. If the plan is to sell, show a realistic as-improved value. For ground-up construction, add plans, a detailed budget, the general contractor's information and a schedule. Lenders can work with an ambitious plan. They cannot work with a vague one.

Gaps that send a file back to the borrower

Most delays come from small inconsistencies rather than big problems. An underwriter who finds one number that does not tie out will start checking every other number, and each question costs days. Before you send anything, read the package the way a skeptical stranger would.

• A rent roll dated months earlier than the operating statement, so occupancy figures conflict
• Operating statements with lumped expense lines, such as one figure for repairs, payroll and management
• Missing months in the trailing twelve, often from a change in property manager or software
• A personal financial statement that lists different property values or loan balances than the schedule of real estate owned
• Tax bills from the wrong year, or ones that ignore a pending reappraisal by the Dallas or Tarrant appraisal district
• An operating agreement that names members who are no longer owners

What you can do yourself, and where help pays off

Almost everything on these lists is something you can gather on your own. Create one shared folder, name files clearly, and keep a simple index of what is included and what is still coming. Lenders and their attorneys notice organization, and it saves days of back-and-forth.

Two areas are worth outside help. If your property or business financials are behind or were prepared casually, a CPA such as Joe Hockaday can bring the books and returns up to a standard a lender will rely on. And before the package goes out, an advisor who underwrites the deal the way a lender will can spot the problems a credit committee would raise. That is the work we do on every file, and it is usually where a decline gets prevented rather than appealed.

If you are still deciding how much equity you will need, my guide to down payments on Texas apartment buildings walks through the ranges by loan type.

Sending your package to Terrydale

You do not need every item before the first conversation. Start with the operating statement, rent roll, the contract or current loan and a short description of yourself and your plan. We will tell you what the deal likely supports, what is missing and what a lender will focus on. From there, we build the package with you, present it to banks, national lenders and family offices, and manage the diligence list through closing. I explain what happens week by week in how long a commercial loan takes to close.

Our office is in Dallas, and we close loans across Texas and other states. You can submit a request through Terrydale Live or schedule a call with me. One more reason to get the package right: many of the same reports, from operating statements to insurance certificates, keep going to the lender after closing, which I cover in what a lender expects after the loan closes. A system you build now will serve you for the life of the loan.

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