That is an important part of most transactions, rarely do we see a cash deal, without financing.
Let’s be clear that any banker will say that he/she is interested in financing a project – that’s what they are there for. If we just rely on the verbal opinion of the account manager, we are far from the mark.
The bankers then ask for the list of documents to assess the project. This includes financial statements, offers or letters of intent for the project, description of assets. If you receive a verbal message at this stage, that’s fine, but a financing sketch or an “offer” is much better – be careful, it’s a letter of intent. And a writing can take from 2 days to 3 weeks.
Don’t get me wrong, this is not an offer yet! As far as the banks are concerned, the deadlines to date do not count… they begin upon receipt of the study fee check as well as all the documents.
Please note that the first list does not mean that it is the last question or document to be provided. Teams then carry out due diligence, file preparation and credit authorization. This step can take between 48 hours and 3 weeks before formal authorization.
In your offers, keep the time required to get there and do not underestimate this step. Commercial financing usually takes 1 to 5 weeks, and this, when there is no request for a change in the terms and conditions of the offer.
Know where you are at.
And don’t forget: an offer from the bank, usually requires taking security by a notary or a lawyer (approved by the bank) before disbursing… potentially another week before being able to disburse.