Term Sheet Analysis

Unlock Smarter Financing Decisions with Expert Term Sheet Analysis

Why Term Sheet Analysis Matters

Navigating commercial real estate financing can be complex, with each lender offering unique terms that impact your investment’s profitability. Our term sheet analysis service compares critical factors—**loan amounts, interest rates, fees, prepayment penalties, and more**—to empower you with clear, actionable insights.

Montgomery Lending’s expertise helps you evaluate options, minimize costs, and align financing with your strategic goals, whether you’re purchasing, refinancing, or developing a property.

Sample Term Sheet Comparison

Below is an example of how we analyze term sheets from multiple lenders to highlight key differences and considerations for your decision-making.

Lender A: Coastal Pacific Funding

Loan Amount: $12,800,000
Interest Rate (Type): 5.95% Fixed (5-year term)
Amortization Period: 25 Years
Loan Term: 5 Years
DSCR Requirement: 1.35x (Trailing 12-month)
LTV / LTC: 65% LTV
Origination Fee: 1.25% ($160,000)
Prepayment Penalty: Yield Maintenance (Years 1-4), 1% Year 5
Recourse: Full Recourse
Reporting Requirements: Annual (Financials, Rent Roll)

Lender B: Summit Credit Group

Loan Amount: $12,500,000
Interest Rate (Type): SOFR + 2.75% (Variable)
Amortization Period: 30 Years
Loan Term: 7 Years
DSCR Requirement: 1.30x (Trailing 12-month)
LTV / LTC: 62% LTV
Origination Fee: 0.90% ($112,500)
Prepayment Penalty: 2-1-0 (2% Year 1, 1% Year 2, 0% thereafter)
Recourse: Partial Recourse (25% of loan)
Reporting Requirements: Quarterly (Financials, Occupancy, CaPex)

Lender C: Global Asset Trust

Loan Amount: $13,000,000
Interest Rate (Type): 7.99% Fixed (3-year term)
Amortization Period: Interest Only (2 years)
Loan Term: 3 Years
DSCR Requirement: 1.20x (Pro Forma)
LTV / LTC: 68% LTV
Origination Fee: 2.50% ($325,000)
Prepayment Penalty: None (after 6 months)
Recourse: Non-Recourse with carve-outs
Reporting Requirements: Monthly (P&L, Balance Sheet, Renovation)

Key Considerations from this Comparison:

**Global Asset Trust** offers the highest leverage and flexibility for value-add projects with a lower pro-forma DSCR and a valuable Interest-Only period, reducing initial payments significantly. They also provide non-recourse terms and the most flexibility for early exit with no prepayment penalty after six months. However, they come with higher upfront origination fees and require more frequent (monthly) reporting.
**Summit Credit Group** offers a competitive variable interest rate that is lower initially but introduces interest rate risk. They are the most competitive on origination fees and provide a partial recourse option.
**Coastal Pacific Funding** provides a solid fixed rate for a 5-year term with a 25-year amortization. Both Coastal and Global have shorter loan terms, which would require more frequent refinancing planning.

Note: This is a sample comparison. Actual terms vary based on your specific deal.

How Montgomery Lending Helps

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Detailed Analysis: We break down loan economics, fees, prepayment terms, recourse, and covenants to highlight the best fit for your goals.
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Expert Guidance: Our team navigates complex terms like DSCR, LTV, and carve-outs, ensuring you understand the implications.
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Tailored Recommendations: We match you with lenders whose terms align with your investment strategy, minimizing costs and risks.

Get Your Term Sheet Analyzed

Ready to compare your term sheets or explore financing options? Contact Montgomery Lending for a free, personalized analysis tailored to your commercial real estate project.

Reach us at [email protected] or call us to get started.

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