How to place a commercial loan with a bank

Stage 1: define the loan in one line

Before any call, write one line: kind, purpose, amount, collateral, place. For example: “Investor purchase of a 24,000 square foot retail strip, $3,200,000 loan on a $4,500,000 price, Hamilton County, Ohio.” If you cannot write the line, you are not ready to call.

Then run the three numbers a lender will run: loan to value, debt service coverage and, for investor property, debt yield. How bankers evaluate a deal explains each, and the calculators do the arithmetic.

Stage 2: choose banks from the record

There are 4,313 FDIC institution record, Jun 30, 2026 banks on this site. Cut the list on facts:

• Size. A national bank’s loans to one borrower may not exceed 15 percent of capital and surplus under 12 CFR 32.3, and most banks keep a lower house limit. Keep banks for which your loan is an ordinary size.
• Kind. Keep banks that already hold loans of your kind.
• Place. Keep banks with branches in or near the market.

How to pick banks with public data walks through this with a worked example. Aim for five or six names.

Stage 3: first contact, and three questions

Reach a commercial lender, not a branch teller. Finding the right person at a bank covers how. Give the one line, then ask:

1. “Are you adding loans of this kind right now?”
2. “Is this size comfortable for you?”
3. “What would you want to see first?”

How to read the answers. A specific yes to all three, with a named next step, is real interest. “Send it over and we will take a look” with no questions back is politeness. “We would look at it with more equity” or “we like those under two million” is useful: the bank has told you its box. A plain no saves you a month. Thank them and ask who does make that kind of loan.

Stage 4: the package

Send a short first package: the one-page summary, sources and uses, and the core financial documents for your kind of loan. What a lender-ready package looks like lists them, and there is a checklist for each kind of loan in the guides. Send everything at once, labeled, as one set. A package that arrives in six emails over two weeks reads as a borrower who will be slow at every later step.

Stage 5: indication, term sheet, commitment

Three documents, three levels of certainty.

What each document means

When you compare term sheets, read past the rate:

• loan amount, and what it is tied to: a share of value, of cost, or a coverage test;
• rate, how it is set, and whether and when it resets;
• term and amortization, and the balance due at maturity;
• recourse: who guaranties, and how much;
• fees: origination, and what the deposit covers;
• prepayment charge;
• covenants and reporting;
• deposit account requirements;
• conditions and the expiry date.

Worked example (hypothetical). Two term sheets arrive for the $3,200,000 loan.

Bank A: 6.75 percent fixed for 5 years, 25-year amortization, 1 percent fee, full guaranty. Monthly payment about $22,110.

Bank B: 6.50 percent fixed for 5 years, 20-year amortization, 0.5 percent fee, full guaranty. Monthly payment about $23,860.

Bank B has the better rate and fee and a payment $1,750 a month higher, because it repays principal faster. If the property’s net operating income is $330,000, annual payments of $265,300 at Bank A give coverage of 1.24, and $286,300 at Bank B give 1.15. If Bank B’s own minimum is 1.20, its term sheet will not survive underwriting at that amount. The better-looking offer may be the one that gets cut.

The fees differ by $16,000 ($32,000 less $16,000). All figures are assumptions for the example.

Looking for a lender now? Find lenders for this in your state.

Stage 6: underwriting and the credit decision

The lender who took your call is usually not the person who decides. The lender writes a credit memo: the request, the borrower, the numbers, the risks and what offsets them. A credit officer reviews it. Then it goes to whoever has authority for a loan of that size, which may be an individual, two signatures, or a credit committee that meets on a schedule. Ask at the start who decides and when they meet.

During this stage the lender will come back with questions. Answer the same day if you can. Every unanswered question is a reason for the memo to wait for the next meeting.

If the answer is no, you are entitled to know. Under Regulation B, 12 CFR 1002.9, a creditor must notify a business of the action taken, and a business may ask for the reasons. The timing and form differ by the size of the business. See what to do after a bank says no.

Stage 7: commitment and conditions

The commitment letter lists conditions. Read every one and ask which are the borrower’s to satisfy and which the bank’s. Typical conditions: a satisfactory appraisal at or above a stated value, environmental and title review, entity documents, insurance, proof of equity, and no material change in the borrower’s finances.

“Satisfactory appraisal” is the condition that changes loans. If value comes in under the figure the terms were built on, the bank will reduce the loan to hold its loan to value limit.

Stage 8: reports, documents and closing

Some closing items are required by federal rule and are not the bank’s choice.

Closing items with a federal rule behind them

The appraisal and flood citations are the FDIC’s rules. The OCC and the Federal Reserve have parallel rules for the banks they supervise.

Other closing items are the bank’s policy or its counsel’s: title insurance, a survey, environmental review, entity resolutions and good standing certificates, evidence of property and liability insurance naming the bank, a legal opinion on larger loans, and leases or estoppels for rented property.

The bank orders the appraisal. You cannot supply your own. Order nothing yourself without asking.

Stage 9: after closing

The loan agreement will require things each year: financial statements and tax returns by a date, a rent roll, proof of insurance, sometimes a covenant calculation. Late reporting strains a relationship with a bank and is easy to prevent. Put the dates in a calendar on the day you close.

Want a person to check the public record for a commercial loan? Request financing from The Lender Report’s operator. A person replies by email, usually naming lenders that have made loans like yours. It is free, it covers business and investment property loans only, and nothing is sent to a lender.

What the public record shows, and what it does not

It shows: which banks are large enough, hold loans of your kind and lend where you are.

It does not show: which bank wants the loan this month, what it will charge, who decides, or how long it will take. Those come from the calls.

Questions to put to the bank

• Who makes the credit decision on a loan this size, and when do they meet?
• What does the deposit pay for, and is any of it refundable?
• Which reports will you order, from whom, and how long do they usually take?
• Which condition in the commitment is most likely to change the loan?
• What will you need from me each year after closing?

General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.

Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem