Credit approval

Credit approval is the point at which a lender's credit function has formally reviewed and approved a facility, moving beyond indicative terms to a firm decision, though usually still subject to a defined list of conditions precedent that must be satisfied before funds are advanced. It follows full assessment of the borrower, the security and, on a development facility, the project feasibility, and represents a materially firmer position than a term sheet or indicative terms issued earlier in the process. For a borrower, credit approval is the milestone that allows genuine confidence in a transaction proceeding, though it is not the same as settlement, and outstanding conditions such as a satisfactory final valuation, executed guarantees or a priority deed with an existing lender still need to be cleared. Lenders vary in how much detail they share about their internal credit process, but a broker experienced with a given lender's credit committee can generally anticipate what additional information will smooth the path from application to approval.

Related

Term sheet · Conditions precedent · Conditions subsequent