A loan participation is an agreement between an existing lender (BankFirst) and participants (banks, thrifts, finance companies, etc.), which take a participating interest in the existing lender's commitment. In participations, BankFirst serves as the lead lender. The Marshall Group participates out interest in the loans which BankFirst underwrites. The Marshall Group invites other banks and institutional lenders to share in the lending opportunity as a participant.
How Lenders Participate
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Once a loan is released to the market, The Marshall Group identifies potential interested banks and other financial institutions. Its sales team works with each prospective participant to discuss the loan in further detail. Prior to approval, each lender is required to complete its own underwriting analysis of the borrower and the credit, as per normal credit requirements and standards.
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Once a lender elects to join in a loan participation, an initial confirmation letter is written describing the basic terms of the loan interest purchased. Prior to funding, each lender is provided with a fully executed participation agreement setting forth the rights and responsibilities of Marshall BankFirst and its participants.
- For each loan, participants will have a complete loan/credit file which contains copies of all loan documentation, including a loan amortization schedule, insurance information, and financial statements for the project, the borrower and the guarantor. For a real estate loan, the file will also include a Phase I environmental audit, an appraisal of the project, a current survey and a title insurance policy.