8 January 2026

What lenders usually ask after a pre-loan diligence memo

Expect questions on working-capital swings, related parties, and how management will report covenants — prepare answers before the bank meeting.

A pre-loan financial due diligence memo is a conversation starter with the bank, not the end of the story. Relationship managers and credit officers return with pointed questions. Anticipating them shortens the path to a term sheet.

Working-capital seasonality

If receivables spike every third quarter, say so in the memo and in the meeting. Lenders dislike discovering seasonality from a missed covenant later. Show the cash trough months and how inventory builds ahead of peak shipping.

Related-party clarity

Balances with affiliates, founders, or sister companies draw scrutiny even when legitimate. Have invoices, board minutes, and repayment schedules ready. Ambiguity here slows credit committees more than a clearly disclosed shareholder loan.

Covenant reporting rhythm

Banks ask who will calculate covenants and when. Name the finance owner and the calendar. If your monthly pack arrives late today, fix that process before promising tighter reporting under the facility.