In one sentence
The master contract for the loan: conditions to funding, representations, covenants, reserves, cash management, transfer rules, and events of default.
The longer version
Everything the lender is relying on lives here: what must be true at closing, what the borrower must do and not do during the term, what gets escrowed, and what happens when something breaks. The other documents implement what this one promises.
For closers, the conditions precedent section effectively IS the closing checklist. Reading it against the actual checklist at kickoff prevents the late discovery that a required item was never requested.
In Prodeal
Checklist templates map to the conditions precedent, so the request list matches what the documents actually require instead of a generic form.
Common questions
- What is in a commercial loan agreement?
- Conditions to funding, representations and warranties, financial and operating covenants, reserve and cash management terms, transfer restrictions, events of default and remedies. It is the operating manual for the loan.
- What is the difference between a loan agreement and a promissory note?
- The note is the promise to repay. The loan agreement sets the rules both parties live by while the loan is outstanding, including the covenants a borrower can breach without missing a payment.
- Which loan agreement terms matter most after closing?
- The covenants, reporting deadlines, reserve requirements and transfer restrictions, because they create obligations every month and quarter. Those are what loan administration tracks.
Keep reading
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The CRE due diligence checklistEvery phase of diligence, organized the way deals close.
- The commercial loan closing timelineThe stages and what sets the pace.
- Loan closing softwareWhere this item is cleared before funding.