What a lender actually checks before funding a project
Developers usually present a project in the order they are proud of it: location, design, amenities, price. A lender reads it in almost the opposite order, and stops early if the first items fail.
1. The title
Before anything else, a panel advocate reads the chain of ownership. Is the land clearly owned by the entity applying? Is it free of encumbrance? Are there earlier agreements, family partitions, tenancy claims, or a development agreement that complicates who may sell what?
A title that needs explaining is a title that will need explaining to every buyer's bank as well. This is the single most common place a file stops, and it stops there permanently — no interest rate makes an unclear title acceptable.
2. The approvals
Development permission, approved plans, commencement certificate, environmental clearance where applicable, and RERA registration. What matters is not just that they exist but that what is being built matches what was sanctioned. A deviation from the approved plan is a regularisation problem, and a regularisation problem is a lending problem.
3. The promoter
Then the people. Commercial bureau records for the entity, personal bureau records for the partners or directors, and the position of other group companies. An overdue account in an unrelated business the promoter is a director of will surface here, and it will matter.
Track record counts too: projects completed, whether they finished near their committed dates, and whether earlier lenders were repaid as agreed. A first-time developer is not refused for being new, but is examined harder and usually asked for more of his own money in the deal.
Those three come first. Everything below only gets read if those clear.
4. The numbers
Project cost against the promoter's own contribution. Most lenders want to see the promoter's money in the ground before theirs goes in — land already paid for, some construction already done. The proportion varies by institution and by the strength of the rest of the file.
Then the repayment logic: projected sales, the pace they assume, and whether the loan services itself from receipts even if sales run materially slower than projected. A lender is not asking whether your projection is achievable. It is asking what happens if it is not.
5. The security
Usually a mortgage of the project land and the construction on it, an assignment of receivables, and an escrow arrangement through which buyer money flows. Personal or corporate guarantees are common. The cover expected — the value of security against the loan — varies with everything above.
6. The market
Last, and lightest: is there demand for this configuration in this area at this price? A technical valuer visits, forms a view on the location and the stage of construction, and the credit team compares the pricing against what is transacting nearby.
Developers expect this to be the main conversation. It almost never is.
Why the order is worth knowing
If your presentation opens with elevations and amenities, you are answering question six while the lender is still on question one. The files that move fastest are the ones where the title opinion, the approvals set and the bureau position are ready on day one and handed over without being asked for.
That is not a trick. It simply removes the six weeks that most files spend waiting for documents the developer always had.
Who writes this, and what they are not. The Loan Consultant View is written by Kamal Thakkar & Co., a loan consultancy that places files with banks and NBFCs in Ahmedabad every week. We are an intermediary, not a lender. We do not approve, decline or price any loan.
This column is published to inform, not to solicit business. Nothing in it is an offer of finance, an invitation to apply for a loan, or advice on any particular project. Lending norms differ between institutions and change without notice — verify the position for your own case with the bank concerned. Full terms are on our disclaimer page.