Sample Bank Letter Of Commitment Template


Sample Bank Letter of Commitment
SBA 504 program
Name of CDC contact
Title of CDC contact
Name of CDC
Address of CDC
City, State Zip Code
Address, City, State
Dear [name of CDC contact]:
[Insert Name of Lender] has reviewed the borrower’s application for a $
loan for
full project financing for the purchase and improvements of the real estate 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 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 [insert name of CDC] in the
SBA 504 loan program to benefit [Insert Name]. In this connection, the Bank's $
(50% of Project Cost) would have an initial rate of interest at [insert interest rate]. The note
will be for a term of [insert term] to be fully amortized over the loan term. This loan is to be
secured by a first security lien on the subject real estate.
In addition, [Insert Name of Lender], is willing to provide an interim loan in the amount of $
(40% of the Project Cost) to be repaid from the proceeds of the debenture sale. This interim
loan is to be secured by a second security lien 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 (currently waived under ARRA). This is
conditioned on the final Bank approval as well as the approval by the Small Business
Name of Lending Official


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Parent category: Letters