What is an Executive Summary, and why do some banks require this to get a commercial loan?
An Executive Summary is a concise overview of a business plan or proposal. It typically includes the key information about the business, such as its products or services, target market, competitive advantage, management team, financial projections, and funding needs. The purpose of an Executive Summary is to provide the reader with a quick and compelling overview of the business plan, in order to generate interest and support for the proposal.
Some banks require an Executive Summary as part of the application process for a commercial loan. The reason for this is that the Executive Summary serves as a summary of the entire business plan, and allows the bank to quickly assess the potential risks and rewards associated with the loan.
Banks want to ensure that the borrower has a viable business plan and a clear understanding of their funding needs, as well as the ability to repay the loan. By reviewing the Executive Summary, banks can determine whether the loan is a good fit for their lending criteria, and whether the borrower is a good credit risk. Additionally, a well-crafted Executive Summary can help the borrower to make a compelling case for why they should receive the loan, and can improve their chances of getting approved.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.