The Due Diligence Process
As you work through the First National due diligence process, you can anticipate being asked to provide documentation to complete the Due Diligence Package. Timely submission of this documentation can keep your approval process on track for completion according to a reasonably expected timetable. While all deals are unique, and requirements vary according to loan type, a typical loan transaction would include a review of the below.
Documentation Requested During a First National Due Diligence Process
Facility: You may be asked to provide specific statistical operational information or projections for the Borrower which may include specialized building permits, food and beverage permits, or special environmental considerations.
Ownership: First National will ask to review all formation documents, bylaws and amendments, as well as a list of principals and owners.
Financial Information: You will be asked to supply actual annual financial statements and tax returns, as well as detailed projections of revenue sources including 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.
Management and Staff: 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.
Permits & Approvals: 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.
Contracts: 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.