The Commercial Loan Closing Timeline: From Signed Term Sheet to Wire Funding

Phase 1: Term Sheet Execution & Expense Deposit (Days 1–7)

• Borrower signs loan application or term sheet and wires third-party diligence deposit.
• Lender engages independent appraiser, environmental firm (Phase I ESA), and PCA engineer.
• Borrower submits corporate entity organizational documents and opening title order.

Phase 2: Underwriting & Third-Party Reports (Days 8–28)

• Lender credit team underwrites certified rent rolls, historical T12s, and tenant leases.
• Third-party reports delivered; lender engineers verify environmental condition and replacement reserves.
• Formal credit committee presentation and final loan approval commitment issued.

Phase 3: Loan Document Drafting & Title Review (Days 29–40)

• Lender legal counsel drafts customized promissory notes, mortgages, guarantees, and loan agreements.
• Title commitment reviewed; required ALTA endorsements ordered; survey exceptions cleared.
• Tenant estoppel certificates and executed SNDA agreements gathered from commercial tenants.

Phase 4: Escrow Signing, Funding & Recordation (Days 41–45)

• Borrower signs loan documents in escrow with a mobile notary; delivery of legal opinion letters.
• Settlement statement finalized; borrower wires required equity to close.
• Lender wires gross loan proceeds; title records mortgage and releases net funds to seller/borrower.

The Commercial Dry Closing Process

All legal documents, closing statements, and affidavits are executed and deposited into escrow 24 to 48 hours prior to closing. Lender counsel reviews the signed documents and authorizes the wire. Funds are held in escrow until the title company confirms that recording documents are in hand and the loan policy can be issued.