In this Broker educational series, we sit down with Funding’s Senior Credit Manager, Arrin Bowker, to discuss what is paramount in a private lending loan application.
The quality of the initial application often dictates the speed of loan approval and settlement. To help brokers and borrowers, Arrin outlines the vital elements of an application and discusses the initial conversation that needs to occur to ensure all parties are across the loan and its purpose.
This video is part six and concludes our series. Here, Arrin discusses why brokers and borrowers must outline all income sources and demonstrate that they are capable of servicing the loan.
Once all income sources are identified and listed, borrowers can work with our credit team to determine the servicing strategy, whether on an interest-only basis, interest ratio, or debt-service coverage ratio that includes principal reductions.
Arrin also outlines the difference between a borrower’s servicing capacity and exit strategy and why both are necessary for a private lending deal’s success.