At First National, conducting thorough due diligence is a cornerstone of our lending process. Our team of experienced professionals meticulously examines every aspect of a loan application. This ensures that we have a comprehensive understanding of the borrower’s financial situation and objectives.
We analyze financial statements, cash flow projections, credit history, and collateral value to assess the borrower’s ability to repay the loan and the risk associated with the investment. Additionally, we conduct site visits and property inspections to verify the accuracy of the information provided and assess the condition of the collateral.
You may be asked to provide specific statistical operational information or projections for the Borrower. This may include specialized building permits, food and beverage permits, or special environmental considerations.
Another important part of the due diligence process is, First National will ask to review all formation documents, bylaws and amendments, as well as a list of principals and owners.
You will be asked to supply actual annual financial statements and tax returns, as well as detailed projections of revenue sources. This includes any specific operation sources of revenue such as occupancy for ALF facilities, or retail food and beverage, or pro shop revenue for golf shop operations. On the expense side, specific details of operations including payroll and benefits, and equipment leasing costs will be reviewed in addition to departmental expenses for food and beverage operations or retail operations in special asset classes.
Resumes for all key operating staff will be requested, including details as to their prior experience. If a third party management firm will be handling day to day operations, its proposal will be requested as well.
First National carefully reviews specialized permits such as culinary and irrigation water sources and, in addition, reviews all zoning and permit approvals; wetlands, environmental, archeological, endangered species and geotechnical investigations.
To ensure that every element of a project has been adequately planned for and implemented according to industry best practices, contractual agreements and resumes for key party participants will be requested. These may include the project architect, interior designer and builder; and other consultants such as project engineers, and all prime contractors engaged for the project including access roads and parking.
Our rigorous due diligence process enables us to make informed decisions and tailor loan terms that best meet the borrower’s needs while minimizing risk for both parties involved.
