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These guidance notes aim to provide a professional and structured approach to completing a successful proposition to be put before a lender. They should be used to evolve discussions between client and adviser, helping to clarify the process of ascertaining the client's requirements. Gathering the information required for a proposal can be remembered by the pneumonic 'PARTS'.
Brief synopsis of the client’s requirements:
• What do they want the money for?
• Purchase price and the life of the property being purchased?
• Is it to refinance?
Always establish the full requirements at the outset to ensure we are not faced with a further request to complete/continue a project.
• What is the total cost of the transaction?
• Have all costs in the project been budgeted for?
• What is the customer’s contribution and where will it come from?
• Is the contribution borrowed – will additional commitment place undue pressure upon ability to repay?
An assessment of the clients' ability to repay is essential and is considered more important than the security.
• Repayment should be clearly identified at the out set, i.e. tenant income, profits, asset sales, etc.
• Where will repayment come from?
• Can the client afford it from the business’s cash flow?
Normally in line with life expectancy of property purchased.