Sample Bank Letter Of Commitment printable pdf download

Sample Bank Letter of Commitment

SBA 504 program

Date

Name of CDC contact

Title of CDC contact

Name of CDC

Address of CDC

City, State Zip Code

RE:

Name

Address, City, State

Dear [name of CDC contact]:

[Insert Name of Lender] has reviewed the borrower’s application for a $ [insert total project

amount] loan for full project financing for the [insert project components such as purchase,

improvements, construction] of the [real estate and/or equipment] located at [insert

address, city, state]. This Bank is not in a position to meet the borrower’s request for full

project financing at this time as [insert reason, such as, “the loan maturity exceeds our

credit policy”]. To the best of our knowledge, financing of the total project cost is not

available at interest rates and terms prevalent in our community.

[Insert Name of Lender], however, is willing to participate with Nebraska Economic

Development Corp. in the SBA 504 loan program to benefit [Insert Name of applicant]. In

this connection, the Bank's $[insert amount of TPL loan] [insert % of Project Cost] would

have an interest rate of [insert complete interest rate, not just the initial rate]. The note will

be for a term of [insert term] to be amortized over [insert amortization period].

The project is located at [physical address of project property]. The bank commitment is

contingent upon the collateral and guarantors listed below:

The bank will be secured by a 1

Deed of Trust in the amount of [Insert 1

lien

amount] on the real estate and improvements. Additionally, the bank will be secured

by a first lien on the equipment associated with the purchase of the same project.

The respective borrowings will be signed individually by [Insert guarantors] and the

bank will receive a guaranty of the borrowings from the operating entity, [Insert

operating company].

In addition, [Insert Name of Lender], is willing to provide an interim loan in the amount of $

[insert amount of interim loan] [insert % of the Project Cost] to be repaid from the proceeds

of the debenture sale. This interim loan is to be secured by a [insert lien position] on the

subject real estate. In addition, the SBA approval of this loan is conditioned upon the receipt

by SBA from Bank of a one-time participation fee equal to one-half of one percent of the

principal amount of the Bank loan attributable to the 504 project that is senior to SBA.

[Optional: This is conditioned on the final Bank approval as well as the approval by the

Small Business Administration.]

Sincerely

Name of Lending Official

Title

Sample Bank Letter Of Commitment

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