Establish bank fit through a documented repayment request, evidence-led credit questions, and a closing-capital reconciliation.
A bank financing inquiry should establish whether the requested transaction fits the bank’s current credit appetite before the borrower invests heavily in its process. The useful deliverable is a short, testable financing brief: what is being financed, how it repays, which facts remain uncertain, and what decision the bank is being asked to make. A favorable relationship conversation does not resolve those questions.
This guide focuses on the first substantive credit conversation. It does not rank banks or supply a national leverage limit. Its original contribution is an interview and evidence record that helps a borrower separate a property weakness, an institution’s policy choice, and an unresolved information problem.
Start with the repayment proposition
Write a two-sentence explanation of repayment before describing the building’s attractive features. For an acquisition, state whether current collections support payments immediately or whether equity must carry a transition. For construction, identify the completed asset and the separate evidence needed for its sale or refinance.
The OCC’s commercial real estate handbook addresses income-producing property and development lending within a bank supervision framework. It explains that its application depends on the institution’s circumstances. It is useful context for a credit conversation; it is not an offer or a promise that a particular property will meet a bank’s policy.
Organize the request around three dates: the required initial funding, the point when the property should support its obligations, and the proposed final repayment. If those dates depend on a lease, permit, sale, or contribution, identify the dependency rather than presenting the date as settled.
A credit-appetite interview with evidence fields
Use the following record before treating an expression of interest as a viable execution. The “proof” column asks what would resolve the issue; it does not assume the bank must supply confidential policy documents.
| Issue to establish | Specific question | Evidence to retain |
|---|---|---|
| Current property condition | Can this request be considered on existing collections, or only after stabilization? | Dated response and the income period being evaluated |
| Loan purpose | Are purchase, repairs, reserves, and requested distributions all within scope? | Itemized proposed uses and exclusions |
| Credit authority | Which review has occurred, and which decision remains? | Named process stage and remaining conditions |
| Sponsor support | What liquidity, experience, guarantees, and outside obligations will be evaluated? | Required information list and unresolved exceptions |
| Collateral | What property interests and reports will the bank require? | Proposed collateral description and report scope |
| Relationship | What deposits, account services, or other commitments are contemplated? | Written requirements and timing |
| Timing | What has to happen before a funding date can be supported? | Dependency schedule with responsible parties |
Treat an unanswered question as open. “We know this market” does not answer whether current vacancy is acceptable. “We like the sponsor” does not establish the guarantee structure. A specific negative answer can be more useful than an ambiguous positive one because it permits a timely change of structure.
Translate a preliminary sizing discussion into a funding brief
Consider a fictional acquisition with $5,200,000 of total uses: a $5 million price, $80,000 of closing costs, and $120,000 of initial reserves. Assume the bank discusses a $3,400,000 initial advance. Required closing equity is $1,800,000.
Suppose the sponsor has $2 million of verified unrestricted cash but wants to retain $400,000 for other obligations. The cash available for this transaction is only $1,600,000. The brief therefore contains a $200,000 unresolved capital requirement. Calling the proposed loan “about 65% of the project” conceals the operational problem.
| Illustrative funding line | Amount |
|---|---|
| Total transaction uses | $5,200,000 |
| Proposed initial loan advance | $3,400,000 |
| Equity required at closing | $1,800,000 |
| Unrestricted sponsor cash | $2,000,000 |
| Cash retained for other obligations | $400,000 |
| Cash available for this transaction | $1,600,000 |
| Unresolved capital requirement | $200,000 |
These figures are assumptions, not bank standards. The response might be more equity, a smaller purchase price, a revised reserve arrangement the bank actually accepts, or a different transaction. The brief should not quietly assume the retained cash can be spent twice.
Separate policy fit from missing evidence
Classify every issue raised in the conversation. A missing lease abstract is an evidence problem. A loan request beyond the institution’s desired exposure is a fit problem. A property with insufficient cash flow under the proposed payment structure is an economic problem. The categories may overlap, but their remedies differ.
For an evidence problem, assign a document owner and delivery date. For a fit problem, ask whether a different loan amount, structure, or participating institution is actually under consideration. For an economic problem, change the cash-flow assumptions or the capital plan and show the result. Sending the same package again without addressing the reason does not improve the request.
Do not ask a banker to describe an unapproved exception as routine. Instead, document which feature needs an exception, who reviews it, what evidence supports it, and when a decision is needed.
Preserve the distinction between conversation and commitment
At the end of the first credit discussion, circulate a factual recap through the agreed transaction channel. State the requested amount, funded timing, accepted facts, outstanding information, economic issues, and next decision. Ask for corrections. Preserve the version rather than repeatedly overwriting the original request.
A recap is useful administration, not a substitute for the actual financing documents. Have the transaction’s advisers identify what is binding, what remains conditional, and when the borrower becomes exposed to deposits or purchase obligations.
The brief has completed its job when the borrower can answer four questions: why this bank appears to fit, what the bank has actually evaluated, what can still change the financing, and what the owners will do if that change occurs. That is a firmer basis for proceeding than a rate indication disconnected from the transaction’s cash needs.
Sources and evidence
- OCC — Commercial Real Estate Lending, version 2.0Introduction; Real Estate Lending Standards and Interagency Guidelines · Checked 2026-10-21 · OCC examination and supervision context for covered banks; not a borrower approval or universal lender credit box.
Source dates and applicability matter. Report an error or a changed source.