Question about Loan Docs
Can anyone opine on specifics about “loan docs”? You hear the term thrown around a lot in the lending world. But can anyone name a few examples of loan docs or give a list of the most important loan docs? Thanks in advance.
Depends on the bank but most of the standard loan closing binders will be comprised of things like the loan agreement, promissory note, deed of trust, appraisal, intercreditor , assignment of leases and rents, phase 1. This isn’t a comprehensive list - just naming a few.
Would also add guarantees, officer certificates, participations, notices to various parties, etc. But the main one is the loan agreement that details the terms of the borrowing (term, extensions, interest rate, initial funding amount, future funding amount, fees, tests, etc).
…they are the documents that detail the loan.
Loan agreement, note, and guaranty are the main 3
Big three are the loan agreement, promissory note, and mortgage. Guaranty on a recourse loan is the most important document. Loan agreement and note will have the primary business terms. There are usually quite a few additional documents, including assignment of rents, environmental guaranty, assignment and subordination of things like the management agreement, swap documents, etc.
My time is usually spent on the loan agreement, note, mortgage, guaranty, and swap documents. Your attorney is typically running point on the rest, but you should read and understand every document you are agreeing to. Lenders make mistakes (or claim they are mistakes), and consistency across documents can be poor. You may have the language you want in the loan agreement, but then a swap document says something completely different.
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