How to Build a Loan File Capital Partners Will Fund

A loan file capital partners will fund is one they can understand in a single read: a one-page deal summary up front, sources and uses that tie out, leverage and exit math shown rather than asserted, every exception disclosed with the reason you approved it, and the third-party reports indexed behind it. The right documents get a file reviewed; clear presentation gets a decision.

Our complete private loan file checklist covers what belongs in the file. This guide covers how to package it for a capital partner who has never seen the deal. It applies whether you sell whole loans, place them or use a line: our warehouse line of credit alternative page compares those routes, and how private lenders fund more loans explains where packaging fits as you grow. For the checks to finish before you package anything, work through our private lender underwriting checklist.

Key takeaways

• Lead with a one-page deal summary (a short credit memo).
• Show sources and uses and the leverage math (LTV, LTC and ARV) with their inputs.
• Write the exit analysis with a base case and a downside case, not just "borrower will sell."
• Disclose exceptions and mitigants upfront.
• Index the third-party reports and answer questions fast with documents.

What does a capital partner read first?

A capital partner reads the deal summary first and decides from it whether the rest is worth their time.

A good deal summary fits on one page and answers five questions in plain numbers:

1. What is the loan? Amount, rate, term, points, lien, loan type, holdbacks and reserves.
2. What is the property and the plan? Property type, condition and the borrower's business plan.
3. How much leverage is there? LTV on as-is value, loan-to-cost and loan-to-ARV.
4. How does the loan get repaid? Primary exit, fallback and a downside case.
5. Who is the borrower? Entity, guarantors, experience and cash in the deal.

Then add a short paragraph in your own words: why you made this loan, the main risk and how it is mitigated. That is your credit judgment, and it is what a partner is really evaluating.

What should a sample deal summary look like?

Here is a template filled in with a hypothetical fix-and-flip loan. The numbers are illustrative only.

Field	Hypothetical example
Loan type and lien	Fix and flip, first lien, business purpose
Borrower	Single-purpose LLC, two guarantors
Loan amount	$400,000 ($300,000 at closing, $100,000 rehab holdback)
Rate, term, points	11% interest only, 12 months, 2 points
Purchase price	$400,000
Rehab budget	$100,000 (scope of work and contractor bid attached)
As-is value (appraisal)	$420,000
After-repair value (appraisal)	$700,000
Initial advance to as-is value	71% ($300,000 / $420,000)
Loan-to-cost	80% ($400,000 / $500,000)
Loan-to-ARV	57% ($400,000 / $700,000)
Borrower cash in deal	$112,000 (down payment and closing costs)
Primary exit	Sale after renovation
Fallback exit	Refinance into a long-term rental loan
Experience	Six completed flips in the same county in three years, verified
Exceptions	One: see below

Use the same layout on every loan, so a partner knows where to find each number on the next one.

How do you present sources and uses?

Sources and uses show where every dollar comes from and where it goes, and the two columns must add up to the same total.

For the hypothetical loan above:

Uses	Amount	Sources	Amount
Purchase price	$400,000	Loan, initial advance	$300,000
Rehab budget	$100,000	Loan, rehab holdback	$100,000
Closing costs	$12,000	Borrower cash	$112,000
Total	$512,000	Total	$512,000

Tie every line to a document (purchase contract, settlement estimate, contractor bid) and say where the borrower's cash comes from and that you verified it. Bank expectations are a useful benchmark: the OCC's Commercial Real Estate Lending handbook says real estate lending policies should set requirements for borrower equity, including the amounts required, the acceptable types and sources of equity, and the timing of the contribution. Private lenders aren't bound by bank rules, but many partners think the same way.

How should you show leverage: LTV, LTC and ARV?

Show all the ratios that apply to the loan type, with the inputs beside each one, and state which value each one uses.

• LTV on as-is value shows what the collateral covers today.
• LTC shows how much of total project cost the loan funds.
• Loan-to-ARV shows coverage if the plan is completed as described.

Our guide to LTV vs. LTC vs. ARV explains each one. For context, the interagency supervisory loan-to-value limits that banks work within, reproduced in the OCC handbook, are 65% for raw land, 75% for land development, 80% for commercial and multifamily construction, 85% for one-to-four family residential construction and 85% for improved commercial and multifamily property. Those are bank limits, not rules for private lenders, and your own guidelines may differ, but expect partners to ask why if your leverage is well above them.

Rely on a lender-ordered, independent appraisal for the values. The federal banking agencies' Interagency Appraisal and Evaluation Guidelines describe sound collateral valuation as an integral part of the loan underwriting process. Note in the summary that the appraiser is licensed or certified and that the report follows the Uniform Standards of Professional Appraisal Practice (USPAP), published by The Appraisal Foundation. If you reviewed the appraisal and adjusted anything, such as discounting a comparable, say so. Our guide on how to read a real estate appraisal as a lender covers what to check.

How do you write an exit analysis a partner will believe?

Write the exit as a short calculation with base and downside cases, supported by comps or rent data. "The borrower will sell" is a plan; "the borrower can sell 15% below ARV and still repay" is an analysis.

For the hypothetical loan:

• Base case: sale at the $700,000 ARV, less an assumed 8% for selling costs, nets about $644,000 against a $400,000 payoff plus interest.
• Downside case: values fall 15% to $595,000; the same costs leave about $547,000, still above the payoff.
• Fallback: if the sale stalls, a refinance into a long-term rental loan. State the rent assumption and its source, and whether the property would qualify on a debt-service basis.
• Timing: what happens if the rehab runs three months long, and whether an extension option exists.

Our guide to bridge loan exit strategies covers sale, refinance and what to do if neither works.

How should you present the borrower's experience?

Present the borrower's experience as a short, verified table of completed projects that look like this one: address or market, project type, purchase and exit dates, budget versus actual and how it ended. Say how you verified it (settlement statements, deeds, prior lender references).

Relevance matters more than count. See verifying a real estate investor's track record for what to request.

Why disclose exceptions upfront?

Disclose every exception to your own guidelines on the summary page, with the reason you approved it and the mitigant, because a capital partner who finds an undisclosed exception will question the rest of your file.

In the hypothetical, the exception might be that the loan-to-cost is 80% while your guidelines say 75%, mitigated by a 57% loan-to-ARV, a verified borrower with six comparable flips and a holdback that only releases against inspected work. That is how banks are expected to handle it too: the Interagency Guidelines for Real Estate Lending, quoted in the OCC handbook, say approval of a loan outside policy should be supported by a written justification that clearly sets forth all the relevant credit factors, kept as part of the permanent loan file.

Common ones: leverage above guideline, a newer borrower, an unusual title history, an appraisal older than your standard, or a past credit event.

What third-party reports should be indexed?

Index every third-party report in a numbered list at the front of the package, with its date and who ordered it. At a minimum that means the appraisal, the title commitment, insurance evidence and the borrower background and credit reports, plus the scope of work and contractor bid for a renovation, or plans, permits, budget and draw schedule for construction.

Name files consistently and keep one version of each; if a report is updated, replace it and note the change. Our guide to title insurance and title commitments for lenders covers what partners check on title.

How do you answer capital partner questions quickly?

Answer each question with a document or a number, the same day if you can, and update the package so the next reader doesn't have to ask.

• Keep a running Q&A log at the end of the package, so every reviewer sees the same answers.
• Answer the obvious questions in the summary: the main risk, the exception and the downside case.
• Don't guess. "I'll confirm with title by tomorrow" beats a wrong answer.
• Name one contact who knows the loan.

What are the common reasons loan files stall?

Most files stall for reasons the lender could have fixed first:

Why it stalls	What fixes it
No summary; partner has to build the story	One-page deal summary on every loan
Numbers don't match across documents	One source of truth for each figure
Exit is a sentence, not an analysis	Base, downside and fallback cases
Exception found during review	Disclose it with the mitigant upfront
Stale appraisal or title	Note dates; order updates early
Slow or vague answers	Q&A log and one contact

Frequently asked questions

What should be in a loan package for a capital partner?

A one-page deal summary, sources and uses, leverage calculations, an exit analysis with a downside case, a verified borrower experience summary, disclosed exceptions with mitigants, and an indexed set of third-party reports such as the appraisal, title commitment and insurance.

What is a deal summary in private lending?

A deal summary, sometimes called a credit memo, is a one-page overview of a loan: terms, property and plan, leverage, exit, borrower and exceptions, plus the lender's own reasoning for making the loan.

Should I tell a capital partner about exceptions to my lending guidelines?

Yes, upfront. State the exception, why you approved it and what mitigates it. Partners usually accept well-reasoned exceptions; they rarely accept ones they discover on their own.

How Lender Capital fits

Lender Capital offers direct capital placement for first-lien, business-purpose real estate loans: bridge, fix and flip, ground-up construction and DSCR rental. You submit the loan with its full file, a capital partner sees the full file before committing and funds the whole loan at closing, and the loan is assigned to it at closing. You keep servicing and the borrower relationship, and you pay a placement fee from your origination points only when the loan funds. Lenders are reviewed for track record, underwriting and licensing before submitting. You keep your points and earn a yield spread: you set the borrower's note rate, the capital partner receives its agreed rate, and the difference is yours.

To compare placement with a credit line, see our warehouse line of credit alternative page, read how it works for lenders, or apply as a lender.

Sources

• Office of the Comptroller of the Currency, Comptroller's Handbook: Commercial Real Estate Lending (including the Interagency Guidelines for Real Estate Lending)
• FDIC, FIL-82-2010, Interagency Appraisal and Evaluation Guidelines
• The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice (USPAP)