Construction Loans > Commercial Financing and Interviewing the Developer

Commercial Financing and Interviewing the Developer

The Wise Mortgage Banker Asks the Right Questions Before Investing Too Much Time

Suppose a developer begins his search for a commercial construction loan. His construction lender or commercial mortgage banker will have some important early questions. The wise developer will be prepared for them.

Applicant-Developer Initial Questionnaire

1. What is the reason, if any, that local bank financing could not be obtained?
2. Who else are you working with and why can’t they get your project funded?
3. Do you have a previous background in developing this size and type of project before?
4. Do you have an independent, third party feasibility study that says that this development is a good idea?
5. Do you have control of the land, by what means, and for how long?
6. What are the total hard and soft costs for all phases (in USD)?
7. How much of your own money have you put in or are going to put into this project?
8. What is the combined net worth of all Principals who own at least 10% of the project? How much is liquid?
9. Will all Principals provide current Personal Financial Statements? Will they guarantee the loan?
10. Do you have all government approvals? What approvals remain?
11. Do you have preliminary architectural drawings?
12. What is the name of the project? What is the location?

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