How The Commercial Financing Process Works (Part 2)

This page continues the general description of the commercial financing process.

Step 4: Your Decision To Proceed:

Congratulations! If you have gotten this far, it means that a commercial financing source has taken your loan proposal seriously and is willing to finance your project. However, this step is also where many potential deals go to die, because this is where the “dreamers and schemers”! are separated from the serious business people.

You must now decide whether or not to accept the terms offered, sign the Letter of Intent and return it with what is often referred to as an Application fee. This is not an “up-front” fee. Business Money Source has no control of this application fee nor does it benefit in any way from it. This fee is paid directly from you to the lender as described below:

  • While returning the accepted signed LOI, you, the client may be required to deposit up to $5,000 USD into lender’s Escrow Account with an International or American Bank for ‘Application/ Engagement/Underwriting Fee.
  • This amount in the Escrow account is refundable to the client’s/borrower’s bank account, if on later date the lender happens to withdraw / cancel the commercial financing process, due to discrepancy or non-compliance in accordance with the Executive Summary or Business Plan.
  • This deposit fee will be used by the lender to appoint a third party professional or professional entity to perform the due diligence process of verifying the borrower's credibility, net-worth, documentary proof, financial statements and the project viability as a whole, in comparison with the Executive Summary or Business Plan.

Why is the Application Fee necessary in some cases?

Simple answer: The lender/investor had to contract a third party to do the due diligence on your project. The cost of that due diligence has to be paid by someone. From the lenders/investors point of view: If are seeking a loan of many millions of dollars and can’t come up with $5,000…. this is what separates serious business people from the time-wasters!

Note: The appointed third party will be required to be paid by the lender on production of their due diligence report and will not wait to be paid till the closing date or disbursing of loan amount. Even if the closing does not take place, due to some unforeseen circumstances, the third party has to be paid for the work done. This is the case everywhere and in any such situation (like residential & commercial appraisals). If you prefer to discuss, prior to depositing this fee or any other matter, we may be able to arrange a direct conference call with the lender.

Step 5: Closing the Loan and financing your Project.

This is the successful step that you and Business Money Source have been working for! It will only happen if all the “players”: you, Business Money Source and the lenders/investors have done everything in an ethical, professional and forthright manner.

  • If the Due Diligence report comes out ‘positive’, the funding process will be finalized within 40 to 60 days.
  • Expedited service - i.e. to close within 30 to 40 days – available for additional cost (approximately for about U.S. $4,000 not all lenders will offer this service).
  • The lender may appoint a local bank or financial institution to administer the disbursal and repayment of the loan.

Congratulations, you have completed the commercial financing process! Business Money Source considers it an honor and privilege to assist business people worldwide in achieving your financing goals.


In any given transaction, the client/borrower will be responsible for paying the Legal fees, Site visit charges, Appraisal / Valuation Report, Environmental Report, Viability Report (in case of need), Fees related to Due Diligence verifications and any other related Report charges.

Subscribe to free Business Money Success Newsletter below and keep up with the latest options in commercial and business financing. Just enter your email address, first name if you like and hit the subscribe button.

Enter Your E-mail Address
Enter Your First Name (optional)

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Biz Money Now! .

Back to Commercial Financing Process Part 1

Learn the cold hard fact of commercial loans, large project loans and international loans

Learn more about the types of commercial financing

Leave the Commercial Financing Process and return to the Business Money Source homepage