The total a bank counts against its lending limit for one borrower: loans, binding commitments and standby letters of credit, plus loans to related parties that the rules combine.
A lending limit is tested against everything a bank has out to one borrower, not against one loan. Under 12 CFR 32.2 that includes any direct or indirect advance of funds and any contractual commitment to advance funds, such as a qualifying commitment to lend or a standby letter of credit. An undrawn construction loan counts in full.
Separate borrowers can be treated as one. Under 12 CFR 32.5, a loan to one party is attributed to another when the proceeds are used for that other party’s direct benefit, or when the borrowers form a common enterprise. One common enterprise test is that the expected source of repayment is the same for each loan and neither borrower has other income to repay it in full. Three single-property companies that all depend on one owner’s cash can be counted as one borrower.
Credit unions have a parallel rule. Commercial loans to one borrower or group of associated borrowers are capped at the greater of 15 percent of net worth or $100,000, plus 10 percent of net worth when the extra is fully secured by readily marketable collateral.
How it shows up in the data here
No public filing lists a lender's loans by borrower, so this site cannot show how much room a lender has left for you. Bank pages show the estimated largest single loan, and credit union pages show the largest single borrower figure, the greater of 15 percent of net worth or $100,000. Start from banks sized for your loan, then tell the lender about every entity you own that borrows from it.
Go further
- Find lenders by loan size: Banks whose estimated largest single loan is $2.5 million or more.
- Legal lending limit estimate: Work out a limit from capital figures.
- Legal lending limit estimate: The most a bank can lend to one borrower, from public capital figures. Always an estimate.
- The legal lending limit, explained: A bank may not lend more than a set share of its capital to one borrower. The rule explains why a large loan gets shared, and why a lender can say a request is too big for it.
- How to place a commercial loan with a bank: A bank loan moves through the same stages every time. Knowing them tells you what the bank needs at each point, what its answer means, and where time is lost.
Related terms
- Legal lending limit: The most a bank may have outstanding to one borrower by law. For national banks it is 15 percent of capital and surplus, plus 10 percent more when the extra is fully secured by readily marketable collateral.
- Capital and surplus: The capital base a national bank's lending limit is measured against: tier 1 and tier 2 capital plus the part of the loan loss allowance that tier 2 leaves out.
- Credit union single borrower limit: The most a credit union may lend in commercial loans to one borrower or group of associated borrowers: the greater of 15 percent of its net worth or $100,000.
- Unused commitment: The part of a legally binding promise to lend that the borrower has not drawn yet, such as the open amount on a line of credit or the unfunded balance of a construction loan.
- Standby letter of credit: A bank's written promise to pay a third party if the bank's customer does not repay a debt or does not perform an obligation.
- Global cash flow: The combined cash flow of a borrower, its owners and their other businesses, set against all of the debt payments those same parties owe.
Sources
- 12 CFR 32.2, lending limit definitions, retrieved .
- 12 CFR 32.5, combination rules, retrieved .
- 12 CFR 723.4, credit union commercial loan policy, retrieved .
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.