If you’ve applied for a commercial real estate loan before, you’re most likely familiar with the financial documents and appraisals which are required by traditional and private money lenders alike. What you may not be aware of, if it’s your first time applying for a hard money loan, is the need to include an executive summary with your application materials.

What is an executive summary? Generally speaking, it’s an informative abstract (usually one to two pages) aimed at busy executives. It summarizes the main points of a larger proposal (or business plan) concisely and efficiently. The purpose of an executive summary is to help executives make decisions about personnel, policy, or funding, and in some cases, it may be all that your audience reads. Myriad formats for executive summaries can be found online, though for the purpose which we’re discussing here, simple is generally better.

There are certain elements which should be included in the executive summary that accompanies your Colorado hard money loan application:

1. The amount of your loan request: Be very specific and include the funds needed to cover any rehabilitation projects or other construction that will need to be completed to get the property up and running.
2. The reason for your loan request: Summarize your business plan succinctly and efficiently for your hard money lender.
3. Project timeline and scope of work: Provide details such as when you bought the property (if it’s already been purchased), how much it cost you upfront (or will cost), and how much money you have put into it already. You should also layout your future rehabilitation or development plans for the property with estimated dates of completion.
4. Property details: Briefly describe the property itself. Include zoning, buildings, tenants, and anything that makes the property unique.
5. Exit strategy: Concisely state how and when you plan to pay off the loan. This is perhaps the most important part of your executive summary and should be well thought out.

You should convey each of these items as briefly as possible, typically in just a few sentences. Ideally, your executive summary should be no more than one or two pages and serve as a sort of cover letter for the rest of your application materials provided to your hard money lender.

A good way to think about your executive summary is as your opportunity to argue for your loan and your project. It should convey the character of yourself and your property in a way that will persuade the lender that he or she wants to underwrite your loan.

This blog was written by Bob Amter, President of Montegra Capital Resources, LTD., a Colorado hard money lender.  [google_authorship] has been in the private capital lending business for 41 consecutive years.