Selecting A Lender And Working Through Due Diligence

Once you are satisfied with the terms and conditions, interest rate and qualifications of a particular lender, sign their proposal letter and issue them a check to start the due diligence process. Virtually all lenders that operate in this market know how to do due diligence and will work with you expeditiously to get your transaction approved – even if it doesn’t always feel that way. A cooperative and thorough due diligence process is crucial and the more cooperative you are, the easier the process will be. The outcome will, of course, depend upon the results. I’ve seen my share of business plans that say one thing and during due diligence, you find out other things – sometimes good things and sometimes bad things. That’s when “deals” change. It is incumbent upon you to know your project well and to express it succinctly and accurately in your business plan (it doesn’t hurt to be a little conservative and have the lender’s due diligence results be better than your own projections).

Approval, Documentation, Interim Funding And Lease Commencement

Once approval has been granted and accepted by you, then the documentation process begins. Be sure to have a lawyer well-versed in financial transactions. Once the documents have been finalized and signed, then interim funding can begin and your project can get started. The scanning of the imaging center’s first patient usually triggers acceptance of the equipment and the lease or loan commences. The interest rate is locked in and the interest accrued from the interim funding period is often “rolled” into the transaction and the final monthly payment schedule is calculated. All you have to do after this is make sure your project works, you see the number of patients you said you minimally were, collect more cash than you stated in your plan and repay your debt without any missteps.

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