Prepare one reconciled credit case and use it for every financing proposal. Starting with a desired interest rate can conceal reduced proceeds, amortisation, reserves, fees or guarantees that change the owner’s actual funding need.
- [ ] Confirm maturity, notice dates, prepayment terms, current balance and other payoff items from the existing documents.
- [ ] Reconcile monthly historical operations and explain adjustments to lender-defined cash flow.
- [ ] Identify maintenance, renovation, insurance and tax cash needs during the financing period.
- [ ] Obtain proposed loan proceeds and constraints using the lender’s actual DSCR, debt-yield and valuation definitions.
- [ ] Model interest, principal, fees, interest-rate protection where applicable, reserve funding and restrictions on cash release.
- [ ] Compare closing proceeds with the total uses of funds and committed equity.
- [ ] Stress the lowest-cash months and any period when works reduce available rooms.
Do not rely on forecast rate cuts or a future buyer’s generosity to make the current funding plan work. Ask what changes if proceeds are lower, closing slips or a condition prevents a draw. Engage a financing adviser when access, structuring or execution complexity warrants the fee; have the lender confirm report acceptance and required reliance.
Stage output: a comparable financing table and monthly cash roll-forward, with an identified source for every funding gap. An annual DSCR above the lender’s hurdle is not proof that cash is available on each payment date.