A commercial file that lands on a lender's desk half underwritten goes to the bottom of the pile. One that arrives with the income normalised and the story told goes to committee. The desk does the second kind.
Commercial underwriting is the work of turning a borrower's paperwork into the numbers a lender will accept. Rent rolls rarely match operating statements. Expenses are understated by owners and restated by lenders. Vacancy is what the market says, not what the building shows this month. The lender will do all of this anyway; the question is whether it is done before submission by someone on your side, or after submission by someone looking for reasons to say no.
Every unit, every lease, every expiry, reconciled to what the bank statements show was actually collected. The first place a file falls apart and the first place the desk looks.
Actual income less market vacancy less expenses the lender will impute: management, reserves, taxes, insurance, utilities, repairs. The number the loan is sized on.
Lenders apply their own. The desk applies them first so the client hears the realistic number from you, not a lower one from the lender later.
Net worth, liquidity, experience with this asset class, existing debt. Two identical buildings get two different answers depending on who is behind them.
How the loan gets repaid: refinance at maturity on stabilised income, sale, or a takeout by a longer term lender. Every private and bridge file lives or dies on the exit.
A two page summary that explains the property, the borrower, the purpose and the structure in the order a credit committee reads them. The most underrated document in commercial lending.
A rent roll shows $312,000 a year on a twelve unit building. Bank statements show $288,000 collected, because two tenants are in arrears. The owner's statement shows $61,000 of expenses; the lender will impute $104,000 once management, reserves and realistic repairs are added. NOI drops from the $251,000 the client expected to $184,000. At a 1.25 coverage the loan is $500,000 smaller than the client hoped. Better to know on day two than on day forty.
You collect the documents using the first file checklist. The desk underwrites, tells you where the numbers moved and why, and drafts the submission summary. You present the realistic number to the client. The file goes to the lender with the analysis attached, which is why it moves faster than a file the lender has to underwrite from scratch. If you already underwrite your own files, the desk is a second set of eyes before committee, used when you want it.
Part of the Commercial Deal Desk. Previous: deal structuring. Next: difficult files.
Book a discovery call. Bring a rent roll and an operating statement and the desk will show you how it reads them.