Why Loan Commitment and Proposal Letters Matter
Successful commercial lenders understand how to use commitment letters and proposal letters to their advantage. A proposal letter (or letter of intent) is an expression of interest from the lender before credit approval is obtained. A commitment letter evidences the lender’s commitment to lend and is only furnished after credit approval. Typically a commitment letter will contain some form of the following language: lender commits to provide the loan on, and subject to, the terms and conditions set forth herein.
