Commercial Bank Letters: Quick Tips

Quick Tips: Here is what you need to remember when reviewing your bank letter.

  • Does this lender have the ability to lend? Some brokers will issue a letter of intent to a borrower to outline the terms; however, without a true lender the broker could never fund your loan. Any letter from a broker is only a letter of intent. This is true with an SBA approval as well. If the bank doesn’t approve it, the SBA will never fund your loan by itself.
  • What does the letter say? Is this an outline of the loan IF they approve it, or is this a firm commitment from the lender? Review the language carefully so you know what you have. Don’t make decisions to move your project forward if the letter you have doesn’t give you the confidence you need.
  • If it’s not in writing, get it in writing? A lender is not committed to a loan unless it is in writing and on their letterhead. Make sure you see it. I’ve only run into one lender that prefers not to put their commitments in writing. This lender is an exception to the rule.

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