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'.

Purpose

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?

Amount

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?

Repayment

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?

Term

Normally in line with life expectancy of property purchased.

• The norm ranges between 5 to 25 years for property.
• The shorter the term, the less interest the client pays.
• The term should be in line with the clients' ability to repay.

Security

The involvement of security is no substitute for proper credit assessment.

• Property offering greater security will attract the best interest rate.
• Property offered to support the borrowing will require a professional valuation to substantiate open market value.
• If the property is deemed specialised then valuers such as Taylor’s, Pinder’s and Christies will be required to provide their expert opinion and market appraisal.