Credit diligence is more standardized than equity diligence: lenders across banks and private credit funds request substantially the same package, because they are all underwriting the same two questions: can this business service the debt, and what do we recover if it cannot.
That standardization is good news for borrowers. Prepare the package below once, keep it current, and every financing conversation, this year and at every refinancing, starts from ready.
The financial package
- Three years of financial statements, audited or reviewed where available
- Monthly or quarterly interims, current within 90 days
- Financial projections with assumptions, covering the proposed term
- Historical and projected debt service coverage calculations
- Accounts receivable and payable agings
- Revenue by customer and segment for concentration analysis
- Existing debt schedule: balances, rates, maturities, prepayment terms
Collateral and security
- Fixed asset register with locations and encumbrances
- Inventory reporting and valuation methodology
- Real estate deeds, appraisals, and environmental reports where relevant
- Existing UCC filings and lien searches
- Intellectual property schedules, where IP supports the credit
- Insurance schedules with coverage amounts
Legal and corporate
- Formation documents, ownership structure, and org chart
- Existing credit agreements and intercreditor arrangements
- Material contracts, especially any with change-of-control triggers
- Litigation summary and contingent liabilities
- Regulatory licenses and compliance documentation
- Related-party transaction schedule
Process documents
Beyond the base package, prepare a short lender presentation covering the business, the use of proceeds, and the proposed structure, plus a data room index so lender teams can navigate without a guided tour.
If several lenders are competing, keep each in its own permission group: lenders should never see who else is in the process or what terms others were shown. Per-group permissioning, standard in rooms like Papermark, is the control that makes a parallel process manageable.
Keep the package alive after closing
The same room that closed the loan is the natural home for ongoing covenant reporting: quarterly compliance certificates, financial updates, and insurance renewals delivered through a controlled channel with an audit trail. At the next refinancing, diligence becomes an update rather than an excavation.
Next steps
FAQ
How long does lender due diligence take?
For mid-sized credit facilities, commonly four to eight weeks from full package delivery to committee approval, with borrower responsiveness the biggest controllable variable.
Do private credit funds request different documents than banks?
The core package is similar. Private credit processes often move faster and go deeper on projections and downside cases, while banks weight historical coverage and collateral more heavily.
What ratio do lenders care about most?
Debt service coverage, typically wanting comfortable headroom above 1.2x depending on sector, alongside leverage ratios and, for asset-based facilities, collateral coverage.