Pre-Approval letter for commercial loans???

6 Replies

I'm dealing with a "residential" real estate agent on a commercial property.  The agent keeps asking for a pre-approval letter and the deal is stalling out.  Is it common to provide a pre-approval letter from the lender on a commercial loan?

@Sean Grady They're probably used to their standard home buying process on SFRs. However, sometimes I run into this same request. The issue is that most of these loans are so subject property based (rather than your income) that a pre approval drafted prior to a review of the properties financials is really worth less than the paper it's printed on. That being said, I often draft pre approval letters on these types of purchases as long as I have enough details on the deal to crunch a DSCR and proof of assets from the borrower.

Originally posted by @Sean Grady :

I'm dealing with a "residential" real estate agent on a commercial property.  The agent keeps asking for a pre-approval letter and the deal is stalling out.  Is it common to provide a pre-approval letter from the lender on a commercial loan?

 You are right, realtor is wrong. Tell them to check with either their broker (if they do commercial) or whomever is serving as their commercial real estate mentor. Letter of intent and/or proof of funds is more the norm.