DUE DILIGENCE and underwriting

When a project owner applies for funding, the prospective lender requires the prospective client to provide extensive information about the borrowing entity and the collateral offered to secure the loan. The review and evaluation of information by the parties to the transaction and their respective counsel is due diligence. Because the real property is the primary collateral securing a mortgage loan, comprehensive due diligence of the real estate is essential in commercial real estate financing transactions.

Typical Project Due Diligence List:


While no two projects are exactly alike, we are generally going to need the following:

- Business plan

- Clear Executive Summary

- 3 - 5 year pro forma

- Exit Plan

- Construction/Production Budget

- Details on market

- Clear use of funds including our success fee

- Draw schedule

- A Gantt chart for the first 36 months showing any grace period

- Company registration

- Expanded bios on all sponsors/partners

- Passport or ID (Driver’s License will suffice) for all partners/team members

- Bios and or websites of any third-party companies involved including engineering firms, architects, contractors, realtors, etc.

- Details of the property and info on any permitting needs

- Current Capitalization Table including all capital invested to date