What lenders wish you knew before applying for a loan - by Mark Zink

Mark Zink, Melrose Cooperative Bank

Applying for a commercial loan is a detailed and time consuming process which requires both the client and lender to work together to meet a common goal: a financing package which satisfies the needs of both parties. Loan-seekers who are receptive and willing to ask questions will undoubtedly find the process easier and will stand a much better chance of obtaining the financing package best suited for their unique needs. Start off on the right foot by taking note of these pointers before going into your lending institution to begin the process.

1. Bring the Right Documents. Give your lending professional a call prior to your meeting to verify what information will be needed. Be ready to provide us with your, or your business’, tax returns and financial statements from the past three years. Current and past performance is crucial in our assessment of a borrower’s ability to repay a loan. Having the necessary documents in hand when coming through the door will expedite the process.

2. Expect some third party costs. Make sure to budget for expenses you will need to pay prior to closing. Costs associated with appraisals, environmental reports and attorney fees can add up quickly. Setting aside an allotment of funds beforehand can help you avoid setbacks.

3. Work with us so we can work with you. Your lender will find it extremely valuable to have an understanding of your business model and any unique personal circumstances. Sharing this type of information will help to ensure everyone is on the same page throughout the process. If all parties are willing to be open and cooperative from the start, the pieces will align and the puzzle will take shape much easier.

4. Have patience with the paperwork. While many institutions are transitioning to more electronic-friendly practices, there is still a fair amount of paperwork that needs to be completed. Whether it is the loan application itself or a personal financial statement, certain documents help us gauge a borrower’s individual monetary position helping create the narrative for an ultimate loan approval. The process may seem overwhelming, but take your time and ask questions as you go to ensure you have a full understanding of what you are signing.

I can assure you that we want the process to be as seamless and hassle-free as possible for you. As you consider these tips and prepare to take the next step, make sure that you feel comfortable moving forward. Reach out to your lending institution with any questions or concerns so that you can approach the process with confidence and ultimately obtain the financing you set out for.

Mark Zink, vice president commercial lending, Melrose Cooperative Bank, Melrose, Mass.